Section 2405-C. Purchase of new housing loans

(1) The agency is hereby
  directed, to the extent it finds it practicable, to establish a  program
  whereby  it  purchases  new  housing  loans  from banks within the state
  during periods when there is an inadequate supply  of  credit  available
  for  new  residential  improvement  loans or available for such loans at
  carrying charges within the financial means of persons and  families  of
  low or 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 new housing loans  from  banks  at  such
  prices  and  upon  such  terms  and  conditions  as  it shall determine;
  provided, however, that each borrower receiving a housing loan purchased
  by the agency shall be a person of low or moderate income  and  provided
  further  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 housing loans 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 new housing loans, the
  agency shall not be governed or limited by the provisions of clause (i),
  (ii)  or  (iii)  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 new housing
  loans  from banks that each such bank certify that each such new housing
  loan is to an individual borrower and is  in  addition  to  the  housing
  loans 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 new  housing  loans  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
  new  housing  loans  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 housing loan or any subsequent sale or disposition  of  the
  housing loan 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 new housing loans  evidence  satisfactory
  to  the  agency of the making, and if applicable, the servicing, of such
  new housing loans 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 new housing loans may be enforced  by  decree  of  the
  supreme  court. The agency may require as a condition of purchase of new
  housing loans from any national 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  new  housing  loans  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  new
  housing  loan  from  a  bank  that the bank represent and warrant to the
  agency that:
    (a) the unpaid principal balance of the housing loan and the  interest
  rate thereon have been accurately stated to the agency;
    (b)  the  amount  of  the  unpaid  principal balance is justly due and
  owing;
    (c) the bank has no notice  of  the  existence  of  any  counterclaim,
  offset  or  defense  asserted  by  the  mortgagor  or  any  successor in
  interest;
    (d) the housing loan is evidenced and secured in the manner  specified
  in  the bank's undertaking to the agency and all required loan documents
  have been properly recorded with any appropriate public official;
    (e) the housing loan is secured  by  the  security  described  to  the
  agency  subject  only  to  liens,  security  interests  and encumbrances
  described to the agency;
    (f) the borrower  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  loan
  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 housing loan;
    (g) the residential  family  dwelling  unit  improved,  rehabilitated,
  reconstructed  or  redeveloped  with the proceeds of the housing loan is
  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  the  extent  specified  in  the  bank's undertaking to the
  agency; and
    (h) the housing loan is insured or guaranteed by the United States  of
  America  or  any agency thereof, or by a firm which is authorized by the
  superintendent of insurance of the state  of  New  York  to  issue  such
  policies in the state.
    (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 housing loan
  for  the  original purchase price adjusted for amounts subsequently paid
  thereon, as the agency shall determine.
    (10) The agency need  not  require  the  recording  or  filing  of  an
  assignment  of any new housing loan purchased by it from a bank pursuant
  to this section and shall not be required to notify the borrower of  its
  purchase  of  the  housing  loan.  The  agency  shall not be required to
  inspect or take possession of the loan documents if the bank from  which
  the  new  housing loan is purchased by the agency shall enter a contract
  to service such housing loan 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 new
  housing loans, such restrictions upon assumability of the loan,  default
  provisions,  rights  to  accelerate,  and  other terms applicable to new
  housing loans made by banks 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  housing
  loan unless expressly waived in writing by or on behalf of the agency.
    (12)  In  conducting  its program of purchasing new housing loans, the
  agency shall use its best  efforts  to  work  in  conjunction  with  and
  maximize  the  participation  of  programs  operated  by  not-for-profit
  corporations  or   charitable   organizations   for   the   improvement,
  rehabilitation,  reconstruction  or  redevelopment  of  one to four unit
  residences.
    * NB Repealed July 16, 2010