3 CRR-NY 83.11NY-CRR
3 CRR-NY 83.11
3 CRR-NY 83.11
83.11 Prohibitions.
(a) No waiver of legal claims and defenses.
A holder shall not require that a mortgagor waive his/her legal claim and/or defense as a condition of obtaining a shared appreciation mortgage modification agreement, or entering into a shared appreciation agreement.
(b) No modification or deferral fees.
The holder may not charge a mortgagor any fees to modify, renew, extend, or amend a high-cost home loan (as defined by section 6-l of the Banking Law) or to defer any payment due under the terms of a high-cost home loan if, after the modification, renewal, extension or amendment, the loan is still a high-cost home loan or, if no longer a high-cost home loan, the annual percentage rate has not been decreased by at least two percentage points. For purposes of this subdivision, fees shall not include interest that is otherwise payable and consistent with the provisions of the loan documents.
(c) No unfair or deceptive business practices.
The holder shall not engage in any unfair or deceptive business practices, or misrepresent or omit any material information in connection with negotiation, execution or consummation of a shared appreciation mortgage modification agreement or shared appreciation agreement. Such practices include, but are not limited to, misrepresenting the amount of appreciation to which the holder is legally entitled to receive, omitting material information on the upfront cost of the modified mortgage, or failing to adequately make any of the disclosures required under section 83.7 of this Part.
(d) Refusal to communicate with mortgagor’s representative.
The holder of the modified mortgage loan shall not refuse to communicate with an authorized representative of the mortgagor after such representative has provided written authorization signed by the mortgagor, provided that the holder may establish procedures to verify that the representative is in fact authorized to act on behalf of the mortgagor.
(e) Collection of appreciation in violation of the Law.
No shared appreciation agreement or shared appreciation mortgage modification agreement document shall contain any term that grants the holder of the modified mortgage loan the right to receive a share of the appreciation in value other than that provided for in section 83.6 of this Part.
(f) Consummation of a shared appreciation transaction without counseling.
No holder shall execute or consummate a shared appreciation mortgage modification agreement or shared appreciation agreement unless such holder has obtained documentation, in writing, that the terms of the shared appreciation mortgage modification and shared appreciation agreement have been explained to the mortgagor by an attorney representing such mortgagor or by a counselor from a government approved housing counseling agency.
(g) Prepayment penalty.
No shared appreciation agreement shall include terms that require a mortgagor to pay a penalty upon prepayment of the modified mortgage loan.
(h) Appraisal independence.
No holder shall engage in practices that unduly influence the independence of a licensed appraiser. For purposes of this subdivision, such prohibited practices include, but are not limited to:
(1) any action undertaken by the holder, or any other person with an interest in the underlying transaction, to directly or indirectly compensate, coerce, extort, collude, instruct, bribe or intimidate a person or other entity conducting or involved in an appraisal, or attempts to compensate, coerce, extort, collude, instruct, induce, bribe or intimidate such person, for the purpose of causing the appraised value assigned under the appraisal to the property to be based on any factor other than the independent judgment of the licensed appraiser;
(2) mischaracterizing or suborning any mischaracterization of the appraised value of the property securing the extension of the mortgage loan;
(3) seeking to influence an appraiser or otherwise to encourage a targeted value in order to facilitate the making or pricing of the transaction; and
(4) withholding or threatening to withhold timely payment for an appraisal report when the appraisal report or services are provided for in accordance with the contract between the holder and the licensed appraiser and/or his employer.
(i) Principal balance after shared appreciation mortgage modification.
The principal balance of the mortgage loan after the shared appreciation mortgage modification shall be no greater than:
(1) an amount which when combined with other modification factors, such as lower interest rate or term extension, results in monthly payments that are 40% of the mortgagor’s DTI; and
(2) 100 percent of the appraised value.
(j) Capitalization of late fees.
The holder of the mortgage loan shall not capitalize any late fees, and shall waive any such fees assessed against the mortgagor for the period during when the mortgage loan was delinquent.
(k) Sole asset.
Notwithstanding any provisions of State law, regulation or interpretation to the contrary, a holder shall not secure a modified mortgage loan by any real or personal property, other than the residential property securing the modified mortgage loan, nor shall it seek a deficiency judgment in order to satisfy such modified mortgage loan.
3 CRR-NY 83.11
Current through January 31, 2023
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IMPORTANT NOTE REGARDING CONTENT CURRENCY: JULY 31, 2023, is the date of the most recently produced official NYCRR supplement covering this rule section. For later updates to this section, if any, please: consult editions of the NYS Register published after this date; or contact the NYS Department of State Division of Admisnistrative Rules at [email protected]. See Help for additional information on the currency of this unofficial version of the NYS Rules.