What's happening
This bill requires mortgage brokers to give a disclosure comparing old and new total monthly payments when refinancing without escrow.
Why it matters
Helps homeowners make informed decisions. By requiring a direct comparison of old and new payment obligations, the bill ensures that borrowers understand the full financial impact of refinancing, especially when escrow for taxes and insurance is removed.
Prevents “payment shock” surprises. Without this disclosure, borrowers might mistakenly believe their new mortgage payment is lower, not realizing they must now pay property taxes and insurance separately, potentially making their total monthly expenses higher than expected.
Promotes transparency in mortgage transactions. The bill holds mortgage brokers and bankers accountable for clear communication, reducing the risk of misleading or incomplete information during the refinancing process.
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Who cares
Headline styles
Disclose Refi Payment Changes
Plain English, a few words. Used as the page title.
Sponsors
No co-sponsors yet.
History
- Referred to banks
- Referred to banks
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Disclose New Mortgage Payments
In Assembly Committee · Banks · Sponsor Tremaine Wright
Full text
1 pageUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
5290
2019-2020 Regular Sessions
IN SENATE
April 23, 2019
Introduced by Sen. THOMAS -- read twice and ordered printed, and when printed to be committed to the Committee on Banks
AN ACT to amend the banking law, in relation to refinancing of an existing mortgage loan
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Subdivision 3 of section 595-a of the banking law is amended by adding a new paragraph (e) to read as follows:
(e) For any refinancing of an existing mortgage loan, where the mortgagor will no longer be paying property tax or insurance payments into an escrow account, each mortgage broker, mortgage banker and exempt organization shall, prior to closing, provide a separate disclosure which compares the total monthly payments under the previous mortgage with the combined monthly payments for the new mortgage loan, real property taxes and insurance. The banking board may specify the form, content and timing of such disclosure.
§ 2. This act shall take effect on the one hundred eightieth day after it shall have become a law.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD00595-01-9
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the banking law, in relation to refi- nancing 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 impor- tant consideration is the monthly cost of the new loan versus the month- ly 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 active- ly 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
2017-2018:A.6393(Wright): Died in Committee 2015-2016:A.8112(Robinson)/S.2919(Funke):Died in Committee 2013-2014:S.2867(Smith)Referredto BanksCommittee 2011-2012:S.3651(Smith):Referredto BanksCommittee 2009-2010:S.4875(Foley):Referredto BanksCommittee 2007-2008:S.5619(Farley:Referredto BanksCommittee
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.