Section 953. Duties and responsibilities of mortgage investing institutions

1.  Every  mortgage  investing  institution  shall make all payments for
  taxes for which they hold real property tax escrow accounts, in a timely
  manner.
    2. Every mortgage investing institution subject to the  provisions  of
  section  fourteen-b  of  the  banking law shall pay at least the minimum
  rate of interest on each real property tax escrow account as  prescribed
  therein except that any such mortgage investing institution shall not be
  required  to  pay  such  minimum  rate  of interest on real property tax
  escrow accounts established for non-mortgagors.
    3. Every mortgage investing institution shall  deposit  funds  from  a
  real property tax escrow account of a mortgagor in a banking institution
  whose deposits are insured by a federal agency or a licensed branch of a
  foreign  banking  corporation  whose  deposits  are insured by a federal
  agency. Notwithstanding the foregoing provisions  of  this  subdivision,
  the  banking  board  shall have the power, by a three-fifths vote of all
  its members, to exempt from the requirements  of  this  subdivision  any
  banking  organization  which does not receive deposits or share accounts
  from the general public.
    4. No mortgage investing institution shall impose a service charge  or
  any  other fee in connection with the maintenance of a real property tax
  escrow account nor, as provided in section two hundred  fifty-four-d  of
  the real property law, shall a fee be imposed for direct payment of real
  property taxes.
    5.  A  mortgage  investing  institution  may  debit a mortgagor's real
  property tax escrow account for payments of taxes only if actual payment
  for such taxes is made within twenty-one days after such debit.
    6. Every mortgage investing institution shall, at least  annually  and
  without charge to the mortgagor, provide to the mortgagor an analysis of
  the  real  property  tax  escrow account of the mortgagor. Such analysis
  shall contain, for the twelve month period covered by the  analysis,  at
  least:  (i) interest earned; (ii) the amount of taxes paid from the real
  property tax escrow account; and (iii) the account  balance  as  of  the
  beginning  of  the  period  the  analysis  covers and the ending account
  balance as of a specified date within forty-five days preceding the date
  of the analysis. In addition, the mortgage investing institution  shall,
  upon  request  by the mortgagor, provide to the mortgagor without charge
  the date or dates of the payment of taxes from such  real  property  tax
  escrow  account.  The  information  required  by this subdivision may be
  provided  in  notices  otherwise  required  by  federal  or  state  law,
  regulation  or  rule  to  be  sent  on  at  least an annual basis to the
  mortgagor. The analysis shall also contain the following information  in
  at  least  eight  point  bold  face  type in substantially the following
  language:
    (a) that the mortgage investing institution is obligated to  make  all
  payments  for  taxes  for  which the real property tax escrow account is
  maintained and that if any such payments are not  timely,  the  mortgage
  investing  institution is responsible for making such payments including
  any penalties and interest;
    (b) that the mortgagor is obligated to pay one-twelfth  of  the  taxes
  each month to the mortgage investing institution which is deposited into
  the  real  property  tax escrow account, unless there is a deficiency or
  surplus in the account, in which case a greater or lesser amount may  be
  required;
    (c) if the mortgage investing institution is subject to the provisions
  of  subdivision  three  of  this  section,  that  the mortgage investing
  institution must deposit the escrow payments made by the mortgagor in  a

  banking   institution   or  a  licensed  branch  of  a  foreign  banking
  corporation whose deposits are insured by a federal agency; and
    (d)  that  the  mortgage  investing institution cannot impose any fees
  relating to the maintenance of the real property tax escrow account.
    6-a. Every mortgage investing institution shall upon the request of  a
  borrower  who has been notified of the granting of an exemption pursuant
  to section four hundred  twenty-five  of  this  chapter  to  review  the
  expected  real  property  tax  liability  which  is assessable against a
  property which is a one, two or three family dwelling and which  is  the
  primary  residence  of the borrower. In any case, where as the result of
  the granting of such exemption an overage in the escrow shall exist, the
  owner shall be entitled to a proportionate reduction in the amount  such
  mortgage investing institution is authorized to collect and deposit on a
  monthly  basis  into  an  escrow  account  to insure the payment of real
  property taxes. This review shall be considered maintenance  of  a  real
  property tax escrow account.
    7.  Every  mortgage investing institution shall provide written notice
  to a mortgagor no later than ten business days  after  the  transfer  to
  another  mortgage  investing  institution  of  the  right to receive all
  payments from the mortgagor,  including  payments  made  into  the  real
  property  tax  escrow  account,  which  notice  shall  include the name,
  address and telephone number of the mortgage  investing  institution  to
  which  such rights have been transferred. Upon request by the mortgagor,
  the mortgage investing institution shall advise  the  mortgagor  of  the
  amount  of  money in such account as of the date of such transfer. Every
  mortgage investing institution shall remain  fully  liable  to  pay  any
  taxes  which are due and payable prior to the date of such transfer, and
  the mortgage investing  institution  to  which  such  rights  have  been
  transferred  shall  be liable to pay any taxes which are due and payable
  after the date of such  transfer,  unless  otherwise  agreed  among  the
  parties to the transfer.
    8.   Every   mortgage  investing  institution  shall,  no  later  than
  twenty-one days after the final payment of the mortgage loan, where  the
  mortgagor  retains  ownership  of  the property, send to the mortgagor a
  written statement  that  shall  include,  but  not  be  limited  to  the
  following information: (a) that the real property tax escrow account has
  been  or  will  be  terminated  (whichever  is applicable); and (b) that
  unless the mortgagor establishes a new real property tax escrow  account
  with  a mortgage investing institution, the mortgagor will be obliged to
  pay  to  the  appropriate  collecting  officers   taxes   becoming   due
  thereafter.  The  written notice shall also set forth the effective date
  of the termination and shall provide the  name,  address  and  telephone
  number  of each collecting officer or office and advise the mortgagor to
  contact such officer or office for tax billing information.
    8-a. Any mortgage investing institution which does not comply with the
  provisions of subdivision eight of this  section  shall  be  financially
  responsible for interest or penalties charged a former mortgagor of such
  institution  by  a  taxing  municipality,  county, and/or delinquent tax
  enforcement agency for non-payment or  late  payment  of  real  property
  taxes  in  the first taxable year following satisfaction of the mortgage
  held by such institution.
    9. Every mortgage investing  institution  shall,  no  later  than  the
  twenty-fifth  day  of  each month, report to the county director of real
  property tax services, or  the  commissioner  of  finance  for  property
  located in the city of New York, on a form prescribed or approved by the
  state  board, the creation of a real property tax escrow account, or any
  change of a tax billing address required by a transfer or termination of
  a real property tax escrow account pursuant to  subdivisions  seven  and

  eight  of this section, occurring during the prior month with respect to
  real property located in such county or city, as the case  may  be.  The
  county  director  or the commissioner of finance of the city of New York
  shall  thereupon  furnish a copy of such report to the person or persons
  having custody and control of the appropriate assessment roll, tax  roll
  or  data  file, as defined in section fifteen hundred eighty-one of this
  chapter, and such person or persons are hereby authorized  and  directed
  upon receipt of such report to enter the appropriate tax billing address
  on such assessment roll, tax roll or data file.