Legislative and Industry News

Senate and Assembly approve State AMC Licensing Bill–Awaiting Governor Cuomo’s signature

June 21, 2018:  Both branches of the NYS Legislature approved the long sought after AMC licensing bill, as required by Dodd-Frank.  When approved, all 50 states will be compliant by having passed legislation that establishes guidelines  for  Appraisal Management Companies, a federal mandate effective August 2018.

By regulating AMCs, in a manner consistent with federal guidance, New York State will  continue with business as usual, with no disruption to consumers, lenders, appraisers or AMCs. However, should Governor Cuomo not enact the AMC minimum standards,  the ability of the state’s consumers to access the affordable mortgage programs of the federal government will be jeopardized and force all bank and non-bank mortgage lenders that use AMCs to serve the appraisal needs of New York homebuyers to create new business models to facilitate Federally Related Mortgage Transactions. This would unnecessarily increase consumers’ costs and needlessly disrupt New York’s residential marketplace.  

TRUMP:  “It’s a great achievement.”

 On signing S. 2155

May 24, 2018:  Senate bill 2155, the community lender regulatory relief package containing a number of MBA-supported provisions, was signed by President Trump.  “The legislation I’m signing today rolls back the crippling Dodd-Frank regulations that are crushing community banks and credit unions nationwide.    And community banks and credit unions should be regulated the same way.   But they shouldn’t be regulated the same way as the large, complex financial institutions.  And that’s what happened.  And they were being put out of business one by one.  And they weren’t lending.”

The legislation contains a number of MBA-supported provisions, such as:

  • SAFE Act amendments to provide 120 days of transitional authority for MLOs to originate when leaving a depository to join a sponsoring non-bank (or when crossing state lines);
  • Applying TILA consumer protections to PACE/energy efficiency mortgage products;
  • Added safeguards to protect veterans, surviving spouses and service members who utilize the VA Home Loan program’s IRRRL refinancing product;
  • An improved, more workable regulatory regime for the eligibility of High Volatility Commercial Real Estate (HVCRE) construction loans; and,
  • Partial TRID and HMDA relief

Thank you to those who took action on these important issues!  Your advocacy makes a difference.


Brian Montgomery is confirmed as FHA Commissioner

May 23: By a comfortable 74-23 vote yesterday, the Senate approved Brian Montgomery as Assistant Secretary for Housing and FHA Commissioner, ending a nine-month process that saw his nomination repeatedly held up by Senate rules and a backlog of other Trump Administration nominations. Twenty-five Democrats joined 49 Republicans in approving Montgomery.


“BLACK HOLE” IS NO-LONGER, JUST IN TIME FOR THE SPRING SEASON!

On April 26, 2018 the Bureau of Consumer Finance Protection announced that it has addressed Regulation Z pertaining to TRID-RESPA, and re-disclosing changes of fees to borrowers before closing.  Access the new ruling here.


CFPB ISSUES TRID AMENDMENTS FINAL RULE

 On July 7, 2017, the CFPB published “Updates to [the] ‘Know Before You Owe’ Mortgage Disclosure Rule,” to provide more clarity and greater certainty, as well as include technical corrections and amendments. The 560 page document includes:

  • Changes to the assistance loan exemption
  • Expansion of the KBYO/TRID rule for loans on cooperatives
  • Total of Payments calculations and related tolerances
  • The use of informational Loan Estimates
  • Clarifications regarding the Written List of Providers
  • Greater clarity for sharing information among settlement service providers
  • Changes regarding Construction Loans and Calculating Cash to Close
  • and more. For a copy of the rule, click HERE

NY FIRST HOME BILL PASSES

The NY First Home bill A5616/S4058 passed both the New York State Assembly and Senate before the end of the 2017 legislative session.  The legislation would allow individuals to deposit up to $5,000 per year ($10,000 for couples)  of after-tax dollars into a tax-free savings account, to pay for the down payment and closing costs,  in the case of a first-time homebuyer.  In addition, the principal amount would be treated as a state income tax deduction.  To view the legislation, click HERE.


NYS DEPARTMENT OF FINANCIAL SERVICES
PUBLISHES FINAL CYBERSECURITY RULE

Last Thursday, the NYSDFS published a cybersecurity rule that goes into effect on March 1, 2017. However, some parts of the regulation phase in anywhere from 180 days to 2 years in the future. The rule impacts banks, insurance companies, and other financial services institutions regulated by the Department. To view the press release and link to the regulation, click HERE.


NYSDFS PUBLISHES
“CONSUMER BILL OF RIGHTS”

Senate Bill 8159 Part Q, New York’s  vacant and abandoned property legislation, became effective on December 20, 2016. According to the NYSDFS press release on December 7, 2016,  a provision of the new law requires the court overseeing a foreclosure proceeding to provide homeowners a copy of the  Consumer Bill of Rights  at the initial mandatory settlement conference. However within the Consumer Bill of Rights, the borrower is informed of where to go to find out what to bring to the mandatory settlement conference.  There are other notices that the lender/servicer is required to send to the borrower at least 90 days before commencing legal action against the borrower. Consult SB8159 Part Q for specifics.

Under the law, bank and mortgage servicers must complete an inspection of a property subject to delinquency within 90 days and must secure and maintain the property where the bank or servicer has a reasonable basis to believe that the property is vacant and abandoned. Banks and mortgage servicers are required to report all such vacant and abandoned properties to DFS and submit quarterly reports detailing their efforts to secure and maintain the properties and the status of any foreclosure proceedings. If DFS determines that a property that has been deemed vacant and abandoned is not being properly maintained by the relevant bank or mortgage servicer, the Superintendent will exercise her authority to hold the bank or mortgage servicer accountable. Violations are subject to a civil penalty of $500 per day per property.


NY DFS RELEASES FINAL RULE FOR

VACANT AND ABANDONED PROPERTY

On  December 7, 2016 the New York State Department of Financial Services released the Final Rule pertaining to vacant and abandoned properties. The legislation takes effect on December 20, 2016. The New York Mortgage Bankers Association has performed a complete analysis of the changes in the Final Rule, as opposed to the Proposed Rule. The NYMBA Analysis, Proposed Rule and  Final Rule can be obtained by clicking on the following links:

PROPOSED RULE
FINAL RULE
NYMBA ANALYSIS


NY STATE LEGISLATURE
PASSES BILL TO ADDRESS
VACANT AND ABANDONED PROPERTIES

In the early morning hours Saturday, June 18, 2016, the NY State Legislature passed S8159, a bill that would require servicers to maintain vacant and abandoned property that they do not own, for the many years that a foreclosure takes in the state of New York. Federally and state chartered depositories are exempt from the requirement if they either originate, own, service, or maintain their mortgages, or a portion thereof; and have less than 3/10 of 1% of the total loans in the state which they either originate, own, service or maintain.

Lenders/servicers will be required to inspect properties within 90 days of delinquency to determine occupancy, and continue to inspect every 25-30 days. Within 7 days of determining the property is vacant, the lender/servicer must post a notice on the property stating that they are maintaining the property, and provide a phone number to call. If there is no response from the borrower within 7 calendar days of posting, the lender servicer must secure and begin maintaining the property. The lender/servicer may not remove any of the borrower’s personal property. There is a $500 per day fine to lenders/servicers for non-compliance.

The legislation also includes: a requirement to notify delinquent borrowers that they may stay in the property throughout the foreclosure process; a requirement for the NYSDFS to publish a Consumer Bill of Rights; a requirement for a lender/servicer who acquires a property through a judgment of foreclosure to place a property back on the market for sale within 180 days of the deed of sale or within 90 days of renovation of the property, whichever occurs first; extension of “workout” options in the mandatory settlement conference; an expedited foreclosure process for a vacant and abandoned property, if the borrowers fails to appear at the mandatory settlement conference; and technical changes to the STAR Personal Income Tax Credit.

For full text of the bill, click HERE.


 NYS 2016 Budget Reinstates the
Refund of the
Special Additional Mortgage Recording Tax

On Friday evening, April 1, 2016 the New York State Budget was passed. The budget included the following language:

PART LL

“Section 1. Paragraph (b) of subdivision 9 of section 210-B of the tax law, as added by section 17 of part A of chapter 59 of the laws of 2014, is amended to read as follows:

(b) Carryover or refund. In no event shall the credit herein provided for be allowed in an amount which will reduce the tax payable to less than the fixed dollar minimum amount prescribed in paragraph (d) of subdivision one of section two hundred ten of this article. If, however, the amount of credit allowable under this subdivision for any taxable year, including any credit carried over from a prior taxable year, reduces the tax to such amount or if the taxpayer otherwise pays tax based on the fixed dollar minimum amount, any amount of credit not deductible in such taxable year may be carried over to the following year or years and may be deducted from the taxpayer’s tax for such year or years. In lieu of carrying over to the following year or years, the unused portion of credits attributable to the special additional mortgage recording tax paid by the taxpayer as mortgagee with respect to mortgages of real property principally improved or to be improved by one or more structures containing in the aggregate not more than six residential dwelling units, each dwelling unit having its own separate cooking facilities, such taxpayer may elect to treat such unused portion as an overpayment of tax to be credited or refunded in accordance with the provisions of section ten hundred eighty-six of this chapter, except that no interest shall be paid on such overpayment.

  • 2. This act shall take effect immediately and shall be deemed to have been in full force and effect on the same date and in the same manner as part A of chapter 59 of the laws of 2014, took effect.”

As previously reported, upon learning that the 2014 budget eliminated the refund, effective with the 2015 tax year, the NYMBA contacted  the New York State Assembly and Senate; explaining the impact on non-depository lenders, and requesting a correction in the 2016 budget, retroactive back to January 1, 2015. In addition, we asked you to contact your legislators. As a result, there was bipartisan support in the NYS legislature for the correction, and it was added to both the Assembly and Senate One House bills, and inserted into the final bill, passed by both the Assembly and Senate. Our sincere thanks go out to all of you that assisted in this effort. Loss of the refund would have had a devastating impact on mortgage bankers doing business in the state of New York when filing their 2015 tax returns.