N.Y. Comp. Codes R. & Regs. tit. 3 § 41.9

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

Section 41.9 - Correction of errors

A lender of a high cost home loan that, when acting in good faith, fails to comply with the provisions of this section, will not be deemed to have violated this Part and section 6-l of the Banking Law if the lender establishes that either:

(a) within 30 days of the loan closing and prior to the institution of any action under section 6-l of the Banking Law, the borrower is notified of the compliance failure, appropriate restitution is made, and whatever adjustments are necessary are made to the loan to either, at the choice of the borrower:

(1) make the high cost home loan satisfy the requirements of this Part; or

(2) change the terms of the loan in a manner beneficial to the borrower so that the loan is no longer a high cost home loan subject to the provisions of this Part; or

(b) the compliance failure resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid such errors and, within 60 days after the discovery of the compliance failure and prior to the institution of any action under section 6-1 of the Banking Law or the receipt of written notice of the compliance failure, the borrower is notified of the compliance failure, appropriate restitution is made, and whatever adjustments are necessary are made to the loan to either, at the choice of the borrower:

(1) make the high cost home loan satisfy the requirements of this Part; or

(2) change the terms of the loan in a manner beneficial to the borrower so that the loan is no longer a high cost home loan subject to the provisions of this Part. Examples of a bona fide error include clerical, calculation, computer malfunction and programming, and printing errors. An error of legal judgment with respect to a person's obligations under this Part is not a bona fide error.

N.Y. Comp. Codes R. & Regs. Tit. 3 § 41.9