§ 953 — Duties and responsibilities of mortgage investing institutions

§ 953. Duties and responsibilities of mortgage investing institutions.\n1. Every mortgage investing institution shall make all payments for\ntaxes for which they hold real property tax escrow accounts, in a timely\nmanner.\n 2. Every mortgage investing institution subject to the provisions of\nsection fourteen-b of the banking law shall pay at least the minimum\nrate of interest on each real property tax escrow account as prescribed\ntherein except that any such mortgage investing institution shall not be\nrequired to pay such minimum rate of interest on real property tax\nescrow accounts established for non-mortgagors.\n 3. Every mortgage investing institution shall deposit funds from a\nreal property tax escrow account of a mortgagor in a banking institution\nwhose deposits are insured by a federal agency or a licensed branch of a\nforeign banking corporation whose deposits are insured by a federal\nagency. Notwithstanding the foregoing provisions of this subdivision,\nthe superintendent of financial services shall have the power to exempt\nfrom the requirements of this subdivision any banking organization which\ndoes not receive deposits or share accounts from the general public.\n 4. No mortgage investing institution shall impose a service charge or\nany other fee in connection with the maintenance of a real property tax\nescrow account nor, as provided in section two hundred fifty-four-d of\nthe real property law, shall a fee be imposed for direct payment of real\nproperty taxes.\n 5. A mortgage investing institution may debit a mortgagor's real\nproperty tax escrow account for payments of taxes only if actual payment\nfor such taxes is made within twenty-one days after such debit.\n 6. Every mortgage investing institution shall, at least annually and\nwithout charge to the mortgagor, provide to the mortgagor an analysis of\nthe real property tax escrow account of the mortgagor. Such analysis\nshall contain, for the twelve month period covered by the analysis, at\nleast: (i) interest earned; (ii) the amount of taxes paid from the real\nproperty tax escrow account; and (iii) the account balance as of the\nbeginning of the period the analysis covers and the ending account\nbalance as of a specified date within forty-five days preceding the date\nof the analysis. In addition, the mortgage investing institution shall,\nupon request by the mortgagor, provide to the mortgagor without charge\nthe date or dates of the payment of taxes from such real property tax\nescrow account. The information required by this subdivision may be\nprovided in notices otherwise required by federal or state law,\nregulation or rule to be sent on at least an annual basis to the\nmortgagor. The analysis shall also contain the following information in\nat least eight point bold face type in substantially the following\nlanguage:\n (a) that the mortgage investing institution is obligated to make all\npayments for taxes for which the real property tax escrow account is\nmaintained and that if any such payments are not timely, the mortgage\ninvesting institution is responsible for making such payments including\nany penalties and interest;\n (b) that the mortgagor is obligated to pay one-twelfth of the taxes\neach month to the mortgage investing institution which is deposited into\nthe real property tax escrow account, unless there is a deficiency or\nsurplus in the account, in which case a greater or lesser amount may be\nrequired;\n (c) if the mortgage investing institution is subject to the provisions\nof subdivision three of this section, that the mortgage investing\ninstitution must deposit the escrow payments made by the mortgagor in a\nbanking institution or a licensed branch of a foreign banking\ncorporation whose deposits are insured by a federal agency; and\n (d) that the mortgage investing institution cannot impose any fees\nrelating to the maintenance of the real property tax escrow account.\n 6-a. Every mortgage investing institution shall upon the request of a\nborrower who has been notified of the granting of an exemption pursuant\nto section four hundred twenty-five of this chapter to review the\nexpected real property tax liability which is assessable against a\nproperty which is a one, two or three family dwelling and which is the\nprimary residence of the borrower. In any case, where as the result of\nthe granting of such exemption an overage in the escrow shall exist, the\nowner shall be entitled to a proportionate reduction in the amount such\nmortgage investing institution is authorized to collect and deposit on a\nmonthly basis into an escrow account to insure the payment of real\nproperty taxes. This review shall be considered maintenance of a real\nproperty tax escrow account.\n 7. Every mortgage investing institution shall provide written notice\nto a mortgagor no later than ten business days after the transfer to\nanother mortgage investing institution of the right to receive all\npayments from the mortgagor, including payments made into the real\nproperty tax escrow account, which notice shall include the name,\naddress and telephone number of the mortgage investing institution to\nwhich such rights have been transferred. Upon request by the mortgagor,\nthe mortgage investing institution shall advise the mortgagor of the\namount of money in such account as of the date of such transfer. Every\nmortgage investing institution shall remain fully liable to pay any\ntaxes which are due and payable prior to the date of such transfer, and\nthe mortgage investing institution to which such rights have been\ntransferred shall be liable to pay any taxes which are due and payable\nafter the date of such transfer, unless otherwise agreed among the\nparties to the transfer.\n 8. Every mortgage investing institution shall, no later than\ntwenty-one days after the final payment of the mortgage loan, where the\nmortgagor retains ownership of the property, send to the mortgagor a\nwritten statement that shall include, but not be limited to the\nfollowing information: (a) that the real property tax escrow account has\nbeen or will be terminated (whichever is applicable); and (b) that\nunless the mortgagor establishes a new real property tax escrow account\nwith a mortgage investing institution, the mortgagor will be obliged to\npay to the appropriate collecting officers taxes becoming due\nthereafter. The written notice shall also set forth the effective date\nof the termination and shall provide the name, address and telephone\nnumber of each collecting officer or office and advise the mortgagor to\ncontact such officer or office for tax billing information.\n 8-a. Any mortgage investing institution which does not comply with the\nprovisions of subdivision eight of this section shall be financially\nresponsible for interest or penalties charged a former mortgagor of such\ninstitution by a taxing municipality, county, and/or delinquent tax\nenforcement agency for non-payment or late payment of real property\ntaxes in the first taxable year following satisfaction of the mortgage\nheld by such institution.\n 9. Every mortgage investing institution shall, no later than the\ntwenty-fifth day of each month, report to the county director of real\nproperty tax services, or the commissioner of finance for property\nlocated in the city of New York, on a form prescribed or approved by the\ncommissioner, the creation of a real property tax escrow account, or any\nchange of a tax billing address required by a transfer or termination of\na real property tax escrow account pursuant to subdivisions seven and\neight of this section, occurring during the prior month with respect to\nreal property located in such county or city, as the case may be. The\ncounty director or the commissioner of finance of the city of New York\nshall thereupon furnish a copy of such report to the person or persons\nhaving custody and control of the appropriate assessment roll, tax roll\nor data file, as defined in section fifteen hundred eighty-one of this\nchapter, and such person or persons are hereby authorized and directed\nupon receipt of such report to enter the appropriate tax billing address\non such assessment roll, tax roll or data file.\n