§ 281 — Credit line mortgage

§ 281. Credit line mortgage. 1. (a) For the purposes of this section,\na "credit line mortgage" shall mean any mortgage or deed of trust, other\nthan a mortgage or deed of trust made pursuant to a building loan\ncontract as defined in subdivision thirteen of section two of the lien\nlaw, which states that it secures indebtedness under a note, credit\nagreement or other financing agreement that reflects the fact that the\nparties reasonably contemplate entering into a series of advances,\npayments and readvances, and that limits the aggregate amount at any\ntime outstanding to a maximum amount specified in such mortgage or deed\nof trust. For purposes of this section, "credit line mortgage" shall\ninclude a reverse mortgage loan as defined in sections two hundred\neighty and two hundred eighty-a of this article except that such a\ncredit line mortgage of the reverse mortgage loan type shall not be\nsubject to the twenty year limitation set forth in subdivision two of\nthis section.\n (b) Payments made by an authorized lender pursuant to any credit line\nreverse mortgage made in accordance with section two hundred eighty-a of\nthis article during any one year shall be limited to such amount or\nratio as may be determined by the superintendent of financial services.\nIn the event that a borrower does not take payment under such credit\nline during the course of any year then that borrower shall have the\nability to increase the yearly payments by that amount available but not\nborrowed during previous years.\n 2. Any credit line mortgage may, and when so expressed therein, shall\nsecure not only the original indebtedness but also the indebtedness\ncreated by future advances thereunder made within thirty years from the\ndate of the recording of such credit line mortgage, whether such\nadvances are obligatory or are to be made at the option of the lender or\notherwise, to the same extent and with the same priority of lien as if\nsuch future advances had been made at the time such credit line mortgage\nwas recorded pursuant to section two hundred ninety-one of this chapter,\nalthough there may have been no advances made at the time of the\nexecution and acknowledgment of such credit line mortgage, and although\nthere may be no indebtedness outstanding at the time any advance is\nmade. The total amount of indebtedness that may be so secured by a\ncredit line mortgage may increase or decrease from time to time, but the\namount so secured at any one time shall not exceed the maximum amount\nspecified in such credit line mortgage, plus interest thereon at the\nrate provided therein, and plus any disbursements made to protect the\nsecurity of such credit line mortgage, with interest on such\ndisbursements at the rate provided therein.\n 3. Nothing in this section shall affect the priority of a lien under\narticle two of the lien law with respect to future advances made under a\ncredit line mortgage after the filing of the notice of such lien under\nthe lien law.\n 4. This section shall apply to advances made after the effective date\nof this section under a credit line mortgage, whether such credit line\nmortgage is recorded on or after, or was recorded prior to, the\neffective date of this section.\n 5. Nothing in this section shall be construed to limit, impair or\notherwise affect the priority under applicable law without reference to\nthis section of a mortgage, deed of trust, encumbrance or lien which was\nrecorded or filed prior to the effective date of this section.\n