N.Y. Comp. Codes R. & Regs. tit. 3 § 41.4

Current through Register Vol. 46, No. 51, December 18, 2024

Section 41.4 - Additional requirements

The following are required in order to make a high cost home loan.

(a) Mortgage brokers and lenders must give the disclosures required pursuant to Part 38 of this Title, as applicable, to the borrower and any other obligor in writing at the time of application which shall be at least 10 days prior to the closing whether or not funds are then disbursed. In addition, at or prior to taking an application, mortgage brokers and lenders must also deliver, place in the mail, fax or electronically transmit to the borrower a statement in substantially the following form: "Although your aggregate monthly debt payment may decrease, the high cost home loan may increase both (i) your aggregate number of monthly debt payments and (ii) the aggregate amount paid by you over the term of the high cost home loan" if such are likely the case. This disclosure need not be a separate document. A lender may agree with a broker that the broker shall make the disclosures required by this Part and Part 38 of this Title on behalf of the lender. However, it remains the responsibility of the lender to ensure that such disclosures are made. In the event that the lender or broker does not know whether the borrower's application is a high cost home loan application, such disclosure must be made within three days after the lender determines that it is a high cost home loan application, but in any event, at least 10 days prior to the closing. In the event of a telephone application, the disclosure must be made within three days after receipt of the application by telephone, but in any event, at least 10 days prior to the closing. In order to utilize electronic transmission, the lender or broker must first obtain either written or electronically transmitted permission from the borrower.

(b) The lender must report both the favorable and unfavorable payment history of the borrower to a nationally recognized consumer credit bureau at least annually during such period as the lender holds or services the high cost home loan.

(c) Mortgage brokers and lenders that broker or make 10 or more high cost home loans per year must report to the Banking Department annually, on or before March 31st in each year, the names and addresses of the three home improvement contractors, the three consultants and the three attorneys who obtain the largest number of payments directly from the proceeds of high cost home loans made or brokered by the lender or mortgage banker. They must also provide the names and addresses of any home improvement company that is an affiliate. This provision shall not apply to attorneys in their capacity as closing attorneys for lenders.

(d) The following statement in a minimum of 12-point type must appear directly above the borrower's signature line on the application: "The loan which may be offered to you is not necessarily the least expensive loan available to you and you are advised to shop around to determine comparative interest rates, points and other fees and charges." In the event of telephone applications, this disclosure shall be made to the borrower within three days of receipt of an application, but in any event at least 10 days prior to the closing whether or not funds are then disbursed. In the event that the lender or broker does not know whether the borrower's application is a high cost home loan application, such disclosure must be made within three days after the lender determines that it is a high cost home loan application, but in any event, at least 10 days prior to closing whether or not funds are then disbursed. If the mortgage application form is prescribed by a government-sponsored entity, such statement shall be placed on a separate document and attached to the front of the mortgage application.

N.Y. Comp. Codes R. & Regs. Tit. 3 § 41.4