§ 6-A — Investment in obligations of certain persons sixty-five years of age or over incurred to satisfy real property tax indebtedness

§ 6-a. Investment in obligations of certain persons sixty-five years\nof age or over incurred to satisfy real property tax indebtedness. 1.\nSubject to such regulations and restrictions as the superintendent of\nfinancial services finds to be necessary and proper and notwithstanding\nany inconsistent provision of this chapter to the contrary, any bank,\ntrust company, savings bank, savings and loan association, or life\ninsurance company authorized to do business in this state may make loans\ndescribed in subdivision two of this section.\n 2. Banking institutions described in subdivision one may make loans\nunder this section to natural persons aged sixty-five or older subject\nto the following conditions:\n (a) the principal amount of the loan shall not exceed the aggregate\namount of all real property taxes, special ad valorem levies, and\nspecial assessments paid or owing by the borrower for the current or\nprior years or both with respect to real property owned individually or\njointly by such borrower which constitutes the principal residence of\nsuch borrower; provided, however, that the loan agreement may provide\nfor such principal amount to be modified to include the amount of\nadditional real property taxes, special ad valorem levies, and special\nassessments pertaining to such property as they are incurred; and\n (b) such loan shall be secured by a first or second mortgage on the\nproperty which mortgage expressly states in like or similar terms "this\nmortgage is given to secure a loan made pursuant to the provisions of\nsection six-a of the banking law"; and\n (c) the annual interest chargeable on such loan shall not exceed the\nallowable interest chargeable by such lender to any other person, not\nincluding a corporation, on an obligation secured by a first mortgage\nlien; and\n (d) a loan which is undertaken pursuant to this section shall not be\npayable until the sale or other disposition of such property, provided\nhowever that any borrower may discharge any indebtedness he has\nundertaken pursuant to the provisions of this section at any time\nwithout payment of any charges other than principal and interest.\n 3. Subject to regulations of the superintendent of financial services,\nbanking institutions described in subdivision one of this section which\nmake loans pursuant to this section may, pursuant to the loan agreement,\nutilize part or all of the proceeds of such loan to make direct payment\nof real property taxes, special ad valorem levies, and special\nassessments on the property which secures such loan. Any such\ninstitution which retains part or all of the proceeds of such loan for\nthe purpose of making direct payment of such real property taxes,\nspecial ad valorem levies, and special assessments shall be liable to\nsuch borrower, upon failure to pay such taxes, levies, and assessments\nfor the amount of such taxes, levies, and assessments plus penalties and\ninterest imposed thereon.\n 4. Every banking institution which makes direct payment of real\nproperty taxes, special ad valorem levies, and special assessments\npursuant to subdivision three shall at least annually provide to the\nborrower any paid bill it has received for the payment of such taxes,\nlevies, and assessments. Such bill shall be contained in a succeeding\nloan statement as may be sent to such borrower. This section shall not\napply to billings for real property taxes, special ad valorem levies,\nand special assessments transmitted by computer tape by a city with a\npopulation of one million or more persons.\n