S144-2011 Actions

• Jan 4, 2012: REFERRED TO LOCAL GOVERNMENT
• Jan 5, 2011: REFERRED TO LOCAL GOVERNMENT

S144-2011 Memo

BILL NUMBER:S144

TITLE OF BILL:
An act
to amend the real property tax law and the banking law, in relation to
the amounts held in mortgage escrow accounts

PURPOSE OR GENERAL IDEA OF BILL:
Currently, mortgage servicers are allowed to collect a two month
reserve from a mortgagor, over and above the annual tax and insurance
amounts.
This bill would change the law to allow mortgage servicers to collect
a one-month reserve.

SUMMARY OF SPECIFIC PROVISIONS:
Section one would amend subdivision 1 section 953 of the real property
tax law to allow that the amount held in escrow be no more than
on-twelfth the amount of the estimated taxes.

Section two would amend paragraph (a) of subdivision 2 of section 6-k
of the banking law to allow that the amount held in escrow be no more
than one twelfth the amount of the estimated taxes.

JUSTIFICATION:
An escrow reserve is intended to allow a mortgagor to meet increased
taxes or insurance costs without having to advance its own funds to
cover a shortfall. Although servicers are required to pay interest on
the escrow funds, the large reserve unfairly disadvantages the
consumer.
This law will benefit consumers by lowering monthly payments, and
reducing closing costs.

PRIOR LEGISLATIVE HISTORY:
S.7489 of 2009-2010; Referred to Local Government

FISCAL IMPLICATIONS:
None.

EFFECTIVE DATE:
This act shall take effect immediately.

S144-2011 Text

                      S T A T E   O F   N E W   Y O R K
  ________________________________________________________________________

                                     144

                         2011-2012 Regular Sessions

                              I N  SENATE

                                 (PREFILED)

                               January 5, 2011
                                 ___________

  Introduced  by  Sen. MAZIARZ -- read twice and ordered printed, and when
    printed to be committed to the Committee on Local Government

  AN ACT to amend the real property  tax  law  and  the  banking  law,  in
    relation to the amounts held in mortgage escrow accounts

    THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
  BLY, DO ENACT AS FOLLOWS:


    Section 1. Subdivision 1 of section 953 of the real property tax  law,
  as  added  by  chapter  440  of  the laws of 1989, is amended to read as
  follows:

    1. Every mortgage investing institution shall make  all  payments  for
  taxes for which they hold real property tax escrow accounts, in a timely
  manner.    NOTWITHSTANDING FEDERAL LAW, THE AMOUNT HELD IN SUCH ACCOUNTS
  MAY NOT EXCEED THE ESTIMATED ANNUAL AMOUNT OF THE  TAXES  THAT  WILL  BE
  PAID BY MORE THAN ONE-TWELFTH OF SUCH AMOUNT.
    S 2. Paragraph (a) of subdivision 2 of section 6-k of the banking law,
  as  added  by  chapter  563  of  the laws of 1992, is amended to read as
  follows:

    (a) Every mortgage investing institution shall make all  payments  for
  insurance for which they hold real property insurance escrow accounts in
  a  timely manner.   NOTWITHSTANDING FEDERAL LAW, THE AMOUNT HELD IN SUCH
  ACCOUNTS MAY NOT EXCEED THE ESTIMATED ANNUAL  AMOUNT  OF  THE  INSURANCE
  PREMIUMS THAT WILL BE PAID BY MORE THAN ONE-TWELFTH OF SUCH AMOUNT.
    S 3. This act shall take effect immediately.



   EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                        [ ] is old law to be omitted.
                                                             LBD01274-01-1