Bill Text: NY A05598 | 2021-2022 | General Assembly | Introduced
Bill Title: Prohibits mortgagees from requiring mortgagors of certain pieces of real property to purchase flood insurance coverage exceeding the actual value of the loan.
Spectrum: Partisan Bill (Republican 8-0)
Status: (Introduced - Dead) 2022-02-03 - enacting clause stricken [A05598 Detail]
Download: New_York-2021-A05598-Introduced.html
STATE OF NEW YORK ________________________________________________________________________ 5598 2021-2022 Regular Sessions IN ASSEMBLY February 22, 2021 ___________ Introduced by M. of A. HAWLEY, MORINELLO, ASHBY, SALKA -- read once and referred to the Committee on Judiciary AN ACT to amend the real property law, in relation to prohibiting mort- gagees from requiring mortgagors of certain real property to purchase flood insurance exceeding the amount required by federal law The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. The real property law is amended by adding a new section 2 283 to read as follows: 3 § 283. Limits to compulsory flood insurance. 1. No mortgagee shall 4 require a mortgagor to whom the mortgagee makes, increases, extends, or 5 renews any loan secured by improved real property or a mobile home 6 located or to be located in an area that has been identified by the 7 director of the federal emergency management agency as an area having 8 special flood hazards and in which flood insurance has been made avail- 9 able under the national flood insurance act to purchase more coverage 10 than the minimum amount of coverage required by the national flood 11 insurance act, that is, an amount equal to the outstanding principal 12 balance of the loan or the maximum limit of coverage made available 13 under the national flood insurance act, whichever is less. 14 2. No mortgagee shall deny a loan to a mortgagor or prospective mort- 15 gagor of any loan secured by improved real property or a mobile home 16 located or to be located in an area that has been identified by the 17 director of the federal emergency management agency as an area having 18 special flood hazards and in which flood insurance has been made avail- 19 able under the national flood insurance act, on the basis that the mort- 20 gagor declines to purchase flood insurance coverage in excess of an 21 amount equal to the outstanding principal balance of the loan or the 22 maximum limit of coverage made available under the national flood insur- 23 ance act, whichever is less. EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD02054-01-1A. 5598 2 1 3. Any mortgagee found to have required a mortgagor to purchase flood 2 insurance in excess of an amount equal to the outstanding principal 3 balance of the loan or the maximum limit of coverage made available 4 under the national flood insurance act, whichever is less, shall be 5 penalized by a fine not to exceed ten thousand dollars for the first 6 violation, and not to exceed twenty thousand dollars for any subsequent 7 violation. 8 4. Any mortgagee found to have denied a prospective mortgagor a loan 9 secured by improved real property or a mobile home on the basis of the 10 mortgagor's failure to purchase flood insurance in excess of an amount 11 equal to the outstanding principal balance of the loan or the maximum 12 limit of coverage made available under the national flood insurance act, 13 whichever is less, shall be penalized by a fine not to exceed ten thou- 14 sand dollars for the first violation, and not to exceed twenty thousand 15 dollars for any subsequent violation. 16 § 2. This act shall take effect immediately.
