Section 2405-B. Purchase of forward commitment mortgages

(1) A purpose of
  the  agency shall be to purchase forward commitment mortgages from banks
  within the state during periods when there is an  inadequate  supply  of
  credit  available  for  new  residential mortgages or available for such
  loans at carrying charges within the  financial  means  of  persons  and
  families of low and moderate income.
    It  is  hereby  found  and declared that such activities by the agency
  will alleviate a condition in this state which is contrary to the public
  health, safety and general welfare and which has constituted in the past
  and from time to time in the future can  be  expected  to  constitute  a
  public  emergency.  It  is further found and declared that such purposes
  are in all respects for the benefit of the people of the  state  of  New
  York  and  the  agency  shall  be  regarded  as  performing an essential
  governmental function in carrying out its purposes and in exercising the
  powers granted by this title.
    (2) The agency shall purchase forward commitment mortgages from  banks
  at such prices and upon such terms and conditions as it shall determine;
  provided,  however,  that  the  total  purchase  price, exclusive of any
  amounts representing a refund of commitment or other fees paid by a bank
  to the agency, for all mortgages which the agency  commits  to  purchase
  from  a bank at any one time shall in no event be more than the total of
  the unpaid principal balances thereof, plus accrued interest thereon.
    (3)  In  conducting  its  program  of  purchasing  forward  commitment
  mortgages,  the  agency shall be governed by the provisions of paragraph
  (b) of subdivision three of section twenty-four  hundred  five  of  this
  title.
    (4)  The  agency  shall  require as a condition of purchase of forward
  commitment mortgages from banks that each such bank  certify  that  each
  such  forward commitment mortgage is to an individual borrower and is in
  addition to the mortgages such  certifying  bank  otherwise  would  have
  made.
    (5)  Notwithstanding  the  maximum  interest  rate,  if  any, fixed by
  section 5-501 of the general  obligations  law  or  any  other  law  not
  specifically  amending or applicable to this section, the agency may set
  the interest rate to be borne by forward commitment mortgages  purchased
  by  the  agency from banks at a rate or rates which the agency from time
  to time shall determine to be at least  sufficient,  together  with  any
  other  available  monies,  to  provide  for the payment of its bonds and
  notes, and forward commitment mortgages bearing such interest rate shall
  not be deemed to  violate  any  such  law  or  to  be  unenforceable  if
  originated  by  a bank in good faith pursuant to an undertaking with the
  agency with respect to the sale thereof notwithstanding  any  subsequent
  failure of the agency to purchase the mortgage or any subsequent sale or
  disposition  of  the  mortgage  by  the agency to such bank or any other
  person.
    (6) The agency shall require the submission to it by  each  bank  from
  which  the  agency  has  purchased forward commitment mortgages evidence
  satisfactory to the  agency  of  the  making,  and  if  applicable,  the
  servicing,  of such forward commitment mortgages in conformity with such
  bank's undertaking with the agency  and  in  connection  therewith  may,
  through  its  employees  or  agents  or those of the banking department,
  inspect the books and records of any such bank.
    (7) Compliance by any bank with the terms of  its  agreement  with  or
  undertaking  to  the agency with respect to the sale, and if applicable,
  the servicing, of forward commitment mortgages may be enforced by decree
  of the supreme court. The agency may require as a condition of  purchase
  of  forward  commitment mortgages from any bank the consent of such bank
  to the jurisdiction of the supreme court over any such  proceeding.  The

  agency  may  also  require  agreement by any bank, as a condition of the
  agency's purchase of forward commitment mortgages from such bank, to the
  payment of penalties to the agency for violation  by  the  bank  of  its
  undertakings  to  the agency, and such penalties shall be recoverable at
  the suit of the agency.
    (8) The agency shall require as a condition of purchase of any forward
  commitment mortgage from a bank that the bank represent and  warrant  to
  the agency that:
    (a)  the mortgage was not made in satisfaction of an obligation of the
  bank under section twenty-four hundred five of this title;
    (b) the unpaid principal balance of the mortgage and the interest rate
  thereon have been accurately stated to the agency;
    (c) the amount of the unpaid  principal  balance  is  justly  due  and
  owing;
    (d)  the  bank  has  no  notice  of the existence of any counterclaim,
  offset or  defense  asserted  by  the  mortgagor  or  any  successor  in
  interest;
    (e)  the  mortgage  is  evidenced  by  a bond or promissory note and a
  mortgage document which has been properly recorded with the  appropriate
  public official;
    (f)  the  mortgage constitutes a valid first lien on the real property
  described to the agency subject only to real property taxes not yet due,
  installments of assessments not yet due, and easements and  restrictions
  of  record  which do not adversely affect, to a material degree, the use
  or value or the real property or improvements thereon;
    (g) the mortgagor is  not  now  in  default  in  the  payment  of  any
  installment  of principal or interest, escrow funds, real property taxes
  or otherwise in the performance of his obligations  under  the  mortgage
  documents  and  has  not to the knowledge of the bank been in default in
  the performance of any such obligation for a period of longer than sixty
  days during the life of the mortgage; and
    (h) the improvements to the mortgaged real property are covered  by  a
  valid  and subsisting policy of insurance issued by a company authorized
  by the superintendent of insurance to issue such policies in  the  state
  of  New  York  and providing fire and extended coverage to an amount not
  less than eighty percent of the insurable value of the  improvements  to
  the mortgaged real property.
    (9)  Each  bank shall be liable to the agency for any damages suffered
  by the agency by reason of the untruth  of  any  representation  or  the
  breach  of  any warranty and, in the event that any representation shall
  prove to be untrue when made or in the event of any breach of  warranty,
  the bank shall, at the option of the agency, repurchase the mortgage for
  the  original  purchase  price  adjusted  for  amounts subsequently paid
  thereon, as the agency shall determine.
    (10) The agency need not require the recording of an assignment of any
  forward commitment mortgage purchased by it from a bank pursuant to this
  section and shall not  be  required  to  notify  the  mortgagor  of  its
  purchase of the mortgage. The agency shall not be required to inspect or
  take  possession  of  the  mortgage documents if the bank from which the
  forward commitment mortgage is purchased by the  agency  shall  enter  a
  contract to service such mortgage and account to the agency therefor.
    (11)  Notwithstanding  any  other  provision  of  law,  the  agency is
  authorized to require, as a condition to the purchase from banks of  any
  forward  commitment mortgage, such restrictions upon assumability of the
  mortgage, default provisions, rights  to  accelerate,  and  other  terms
  applicable  to  such  forward  commitment  mortgages  made  by  the bank
  pursuant to undertakings with  the  agency  with  respect  to  the  sale
  thereof  as  the  agency  may  determine to be necessary or desirable to

  assure the repayment of its bonds  and  notes  and  the  exemption  from
  federal  income  taxes  of  the interest payable on its bonds and notes.
  All such terms shall be enforceable by the originating bank, the agency,
  and  any  successor  holder  of  the mortgage unless expressly waived in
  writing by or on behalf of the agency.
    * NB Repealed July 16, 2010