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Sponsors
No co-sponsors yet.
History
- Referred to banks
- Referred to banks
Full text
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Sponsor's memo
Title of bill
An act to amend the banking law, in relation to refinancing of an existing mortgage loan
Purpose
To ensure that consumers are appropriately informed when refinancing a mortgage and have the ability to compare the total monthly costs of the previous loan with the total monthly costs of the new loan.
Summary of provisions
Section 595-a(3) of the Banking Law is amended to require mortgage brokers, mortgage bankers or exempt organizations to provide a special disclosure for any mortgage refinancing where the mortgagor will no longer be paying property tax or insurance premiums into an escrow account. In those cases, the disclosure must compare the total monthly payments under the previous loan with the combined monthly payments for the new loan, real property taxes and insurance.
Justification
Consumers may refinance a mortgage loan for numerous reasons. An important consideration is the monthly cost of the new loan versus the monthly cost of the previous loan.
Unfortunately, in some cases, this comparison may be misleading or invalid because the homeowner does not realize or understand that the new total does not include property tax or insurance payments, which may have been included in the previous loan. There is concern that some lenders or mortgage brokers may obscure this information, or may actively mislead the homeowner in order to pressure them into refinance the existing loan. As a result, the new loan may appear to be a better deal, but in reality may be a worse deal.
This bill seeks to ensure that consumers are adequately notified if their new loan will no longer include property tax or insurance payments, and that they are given a clear comparison of the full monthly costs under the previous loan and the full monthly costs under the new loan. This will assist homeowners in making an informed decision.
Legislative history
S.5619 in 2007-2008: Referred to Banks
Fiscal implications
None.
Effective date
On the 180th day after it shall have become a law.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.