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New York State
REAL PROPERTY LAW (RPL)
Laws 1909, Chap. 52
ARTICLE 8
CONVEYANCES AND MORTGAGES
Section 240. Definitions and use of terms.
240b. Certain conveyances authorized;
effect thereof.
240c. Joint tenancy severance.
241. Ancient conveyances abolished.
242. Disclosure prior to the sale of real
property.
243. Grant of fee or freehold.
244. When grant takes effect.
245. Estate which passes by grant or devise.
246. Certain deeds declared grants.
247. Conveyance by tenant for life or years
of greater estate than possessed.
248. Effect of conveyance where property is
leased.
249. Convenants in mortgages.
251. Convenants not implied.
252. Lineal and collateral warranties
abolished.
253. Construction of convenants in grants of
freehold interests.
254. Construction of clauses and convenants
in mortgages and bonds or notes.
254a. Right of election of mortgagee in
certain cases.
254b. Limitation on late charges.
254c. Right to a copy of real property
appraisals and consumer reports in
certain cases.
254d. Fees by mortgagee for direct
payment of real property taxes by
mortgagor prohibited.
255. Construction of grant of appurtenances
and of all the rights and estate of
grantor.
256. Construction of grant in executor's or
trustee's deed of appurtenances, and of the
estate of testator and grantor.
257. Convenants bind representatives of
grantor and mortgagor and inure to the
benefit of whom.
258. Short forms of deeds and mortgages.
259c. Provision in lease of real property
for waiver of trial by jury in actions for
personal injury or property damage.
260. Lands adversely held may be conveyed or
mortgaged.
261. Maintenance of telegraph or other
electric wires raises no presumption of
grant.
265. Fraudulent intent, question of fact.
266. Rights of purchaser or incumbrancer for
valuable consideration protected.
267. Conveyances with power to revoke,
determine or alter.
268. Disaffirmance of fraudulent act by
executor and others.
269. When remainderman may pay interest owed
by life tenant.
270. Powers of courts of equity not abridged.
271. Construction of convenants in mortgages
on leases of real property and bonds or
notes.
272. Construction of grant of appurtenances,
and all of the rights and estate of the
mortgagor.
273. What form of mortgage on lease of real
property.
274. Transfers and mortgages of interest in
decedents' estates.
274a. Certificate of principal amount
unpaid on mortgages of real property.
275. Certificate of discharge of mortgage
required.
276. Effect of certain easements on the right
to invest in mortgages.
277. Modification and extension of mortgage
investment.
277a. Powers of fiduciaries and others
holding guaranteed mortgages or mortgage
investments.
278. Exchange of mortgage investment.
278a. Sale or exchange of certain real
property or mortgage investments therein
authorized.
279. Graduated payment mortgage.
280. Reverse mortgage loans for persons sixty
years of age or older.
280a. Reverse mortgage loans for persons
seventy years of age or older.
281. Credit line mortgage.
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Sec. 240. Definitions and use of terms.
1. The term "heirs," or other words of inheritance, are not
requisite to create or convey an estate in fee.
2. The term "conveyance," as used in this article, includes
every instrument, in writing, except a will, by which any
estate or interest in real property is created, transferred,
assigned or surrendered.
3. Every instrument creating, transferring, assigning or
surrendering an estate or interest in real property must be
construed according to the intent of the parties, so far as
such intent can be gathered from the whole instrument, and
is consistent with the rules of law.
4. The terms "estate" and "interest in real property" include
every such estate and interest, freehold or chattel, legal
or equitable, present or future, vested or contingent.
Sec. 240-b. Certain conveyances authorized; effect thereof.
1. Any person or persons owning real property or an interest in
real property which he or they have power to convey, may
effectively convey such property or interest by a conveyance
naming himself or themselves and another person or persons,
or one or more of themselves and another person or other
persons, as grantees, and the conveyance has the same effect
as to whether it creates an estate in severalty, a joint
tenancy, or a tenancy by the entirety, or tenancy in common,
as if it were a conveyance from a stranger who owned the
property or interest to the persons named as grantees in the
conveyance.
2. Any two or more persons owning real property or an interest
in real property which they have power to convey, may
effectively convey such property or interest by a conveyance
naming one, or more than one, or all such persons, as
grantees, and the conveyance has the same effect, as to
whether it creates an estate in severalty, or a joint
tenancy, or a tenancy by the entirety, or tenancy in common,
as if it were a conveyance from a stranger who owned the
property or interest to the persons named as grantees in the
conveyance.
3. As used in this section, "person" may be a married person
and "persons" may be persons married to each other.
Sec. 240-c. Joint tenancy severance.
1. In addition to any other means by which a joint tenancy with
right of survivorship may be severed, a joint tenant may
unilaterally sever a joint tenancy in real property without
consent of any non-severing joint tenant or tenants by:
(a) Execution and delivery of a deed that conveys legal
title to the severing joint tenant's interest to a
third person, whether or not pursuant to an agreement
requiring the third person to reconvey legal title to
the severing joint tenant; or
(b) Execution of a written instrument that evidences the
intent to sever the joint tenancy, including a deed
that names the severing tenant as the direct grantee of
the severing tenant's interest.
2. No severance of a joint tenancy pursuant to subdivision one
of this section shall terminate the right of survivorship of
any non-severing joint tenant or tenants as to the severing
tenant's interest unless the deed or written instrument
effecting the severance is recorded, prior to the death of
the severing tenant, in the county where the real property
is located.
3. Nothing in this section shall limit the manner or effect of:
(a) A severance of a joint tenancy pursuant to a written
instrument executed by all joint tenants, or pursuant
to a written agreement of all joint tenants.
(b) A severance of a joint tenancy effected by a deed from
a joint tenant to another joint tenant.
(c) A severance ordered by a court of competent
jurisdiction.
Sec. 241. Ancient conveyances abolished.
The conveyance of real property by feoffment, with livery of
seizin, or by fines, or common recoveries, is abolished.
Sec. 242. Disclosure prior to the sale of real property.
1. (a) Any person, firm, company, partnership or
corporation offering to sell real property to which no
utility electric service is provided shall provide
written notice to the prospective purchaser or to the
prospective purchaser's agent, clearly indicating this
fact. Such notice shall be provided prior to accepting
a purchase offer.
(b) Any prospective or actual purchaser who has suffered a
loss due to a violation of this section is entitled to
recover any actual damages incurred from the person
offering to sell said real property.
(c) The provisions of this subdivision shall not apply in
instances where the real property being sold lies
within the applicable free footage allowance or service
lateral specified by the public service commission in
rule, regulation or public utility tariff.
2. Disclosure prior to the sale of real property to which
utility surcharge payments attach.
(a) Any person, firm, company, partnership or corporation
offering to sell real property against which an
electric or gas utility surcharge is assessed for the
purpose of defraying the costs associated with an
electric or gas line extension, or for the purpose of
defraying the costs associated with related facilities,
shall provide written notice to the prospective
purchaser or the prospective purchaser's agent, stating
as follows: "This property is subject to an electric
and/or gas utility surcharge". In addition, such notice
shall also state, the type and purpose of the
surcharge, the amount of the surcharge and whether such
surcharge is payable on a monthly, yearly or other
basis. Such notice shall be provided by the seller
prior to accepting a purchase offer.
(b) Any prospective or actual purchaser who has suffered a
loss due to a violation of this subdivision is entitled
to recover any actual damages incurred from the person
offering to sell or selling said real property.
Sec. 243. Grant of fee or freehold.
A grant in fee or of a freehold estate, must be subscribed by the
person from whom the estate or interest conveyed is intended to
pass, or by his lawful agent thereunto authorized in writing. If
not duly acknowledged before its delivery, according to the
provisions of this chapter, its execution and delivery must be
attested by at least one witness, or, if not so attested, it does
not take effect as against a subsequent purchaser or incumbrancer
until so acknowledged.
Sec. 244. When grant takes effect.
A grant takes effect, so as to vest the estate or interest
intended to be conveyed, only from its delivery; and all the
rules of law, now in force, in respect to the delivery of deeds,
apply to grants hereafter executed.
Sec. 245. Estate which passes by grant or devise.
A grant or devise of real property passes all the estate or
interest of the grantor or testator unless the intent to pass a
less estate or interest appears by the express terms of such
grant or devise or by necessary implication therefrom. A greater
estate or interest does not pass by any grant or conveyance, than
the grantor possessed or could lawfully convey, at the time of
the delivery of the deeds; except that every grant is conclusive
against the grantor and his heirs claiming from him by descent,
and as against a subsequent purchaser or incumbrancer from such
grantor, or from such heirs claiming as such, other than a
subsequent purchaser or incumbrancer in good faith and for a
valuable consideration, who acquires a superior title by a
conveyance that has been first duly recorded.
Sec. 246. Certain deeds declared grants.
Deeds of bargain and sale, and of lease and release, may continue
to be used; and are to be deemed grants, subject to all the
provisions of law in relation thereto.
Sec. 247. Conveyance by tenant for life or years of greater
estate than possessed.
A conveyance made by a tenant for life or years, of a greater
estate than he possesses, or can lawfully convey, does not work a
forfeiture of his estate, but passes to the grantee all the
title, estate or interest which such tenant can lawfully convey.
Sec. 248. Effect of conveyance where property is leased.
An attornment to a grantee is not requisite to the validity of a
conveyance of real property occupied by a tenant, or of the rents
or profits thereof, or any other interest therein. But the
payment of rent to a grantor, by his tenant, before notice of the
conveyance, binds the grantee; and the tenant is not liable to
such grantee, before such notice, for the breach of any condition
of the lease.
Sec. 249. Covenants in mortgages.
A mortgage of real property does not imply a covenant for the
payment of the sum intended to be secured; and where such
covenant is not expressed in the mortgage, or a bond or other
separate instrument to secure such payment has not been given,
the remedies of the mortgagee are confined to the property
mentioned in the mortgage.
Sec. 251. Covenants not implied.
A covenant is not implied in a conveyance of real property,
whether the conveyance contains any special covenant or not.
Sec. 252. Lineal and collateral warranties abolished.
Lineal and collateral warranties, with all their incidents, have
been abolished; but the heirs and devisees of a person, who has
made a covenant or agreement, are answerable thereon, to the
extent of the real property descended or devised to them, in the
cases and in the manner prescribed by law.
Sec. 253. Construction of covenants in grants of freehold
interests.
In grants of freehold interests in real property, the following
or similar covenants must be construed as follows:
1. Seizin.--- A covenant that the grantor "is seized of the
said premises (described) in fee simple, and has good right
to convey the same," must be construed as meaning that such
grantor, at the time of the execution and delivery of the
conveyance, is lawfully seized of a good, absolute and
indefeasible estate of inheritance in fee simple, of and in
all and singular the premises thereby conveyed, with the
tenements, hereditaments and appurtenances thereto
belonging, and has good right, full power and lawful
authority to grant and convey the same by the said
conveyance.
2. Quiet enjoyment.--- A covenant that the grantee "shall
quietly enjoy the said premises," must be construed as
meaning that such grantee, his heirs, successors and
assigns, shall and may, at all times thereafter, peaceably
and quietly have, hold, use, occupy, possess and enjoy the
said premises, and every part and parcel thereof, with the
appurtenances, without any let, suit, trouble, molestation,
eviction, or disturbance of the grantor, his heirs,
successors or assigns, or any person or persons lawfully
claiming or to claim the same.
3. Freedom from incumbrances.--- A covenant "that the said
premises are free from incumbrances," must be construed as
meaning that such premises are free, clear, discharged and
unincumbered of and from all former and other gifts, grants,
titles, charges, estates, judgments, taxes, assessments,
liens and incumbrances, of what nature or kind soever.
4. Further assurance.--- A covenant that the grantor will
"execute or procure any further necessary assurance of the
title to said premises," must be construed as meaning that
the grantor and his heirs, or successors, and all and every
person or persons whomsoever lawfully or equitably deriving
any estate, right, title or interest of, in, or to the
premises conveyed by, from, under, or in trust for him or
them, shall and will at any time or times thereafter upon
the reasonable request, and at the proper costs and charges
of the grantee, his heirs, successors and assigns, make, do,
and execute, or cause to be made, done and executed, all and
every such further and other lawful and reasonable acts,
conveyances and assurances in the law for the better and
more effectually vesting and confirming the premises thereby
granted or so intended to be, in and to the grantee, his
heirs, successors or assigns forever, as by the grantee, his
heirs, successors or assigns, or his or their counsel
learned in the law, shall be reasonably advised or required.
5. Warranty of title.--- A covenant that the grantor "will
forever warrant the title" to the said premises, must be
construed as meaning that the grantor and his heirs, or
successors, the premises granted, and every part and parcel
thereof, with the appurtenances, unto the grantee, his
heirs, successors or assigns, against the grantor and his
heirs or successors, and against all and every person or
persons whomsoever lawfully claiming or to claim the same
shall and will warrant and forever defend.
6. Grantor has not incumbered.--- A covenant that the grantor
"has not done or suffered anything whereby the said premises
have been incumbered," must be construed as meaning that the
grantor has not made, done, committed, executed, or suffered
any act or acts, thing or things whatsoever, whereby or by
means whereof, the above mentioned and described premises,
or any part or parcel thereof, now are, or at any time
hereafter shall or may be impeached, charged or incumbered
in any manner or way whatsoever.
Sec. 254. Construction of clauses and covenants in mortgages
and bonds or notes.
In mortgages of real property, and in bonds and notes secured
thereby or in assignments of mortgages and bonds and mortgages
and notes, or in agreements to extend or to modify the terms of
mortgages and bonds and mortgages and notes, the following or
similar clauses and covenants must be construed as follows:
1. Clauses of mortgage.
The words
"This mortgage, made the ....... (A)....... day of .......
(B) ......., nineteen hundred and ....... (C).......,
between ....... (D) ......., the mortgagor, and .......
(E)......., residing at ....... (F) ......., the mortgagee,
Witnesseth, that to secure the payment of an indebtedness in
the sum of ....... (G)....... dollars, lawful money of the
United States, to be paid on the....... (H) ....... day of
....... (I) ......., nineteen hundred and ....... (J)
......., with interests thereon to be computed from .......
(K)....... at the rate of ....... (L) ....... per centum per
annum, and to be paid ....... (M) ......., according to a
certain bond, note or obligation bearing even date herewith,
the mortgagor hereby mortgages to the mortgagee
(description),"
must be construed as equivalent in meaning to the words
"This indenture, made the ....... (A1)..... day of .......
(B1) ......., in the year nineteen hundred and ....... (C1)
....... between ....... (D1) ......., party of the first
part, and ....... (E1) ......., of ....... (F1) .......,
party of the second part.
"Whereas, the said ....... (D1) ....... is justly indebted
to the said party of the second part in the sum of .......
(G1) ....... dollars, lawful money of the United States,
secured to be paid by his certain bond, note or obligation,
bearing even date herewith, conditioned for the payment of
the said sum of ....... (G1) ....... dollars, on the .......
(H1) ....... day of ....... (I1) ....... nineteen hundred
and ........ (J1) ....... and the interest thereon, to be
computed from ....... (K1) ......., at the rate of .......
(L1) ....... per centum per annum, and to be paid .......
(M1) ...... .
"It being thereby expressly agreed that the whole of the
said principal sum shall become due after default in the
payment of any installment of principal, interest, taxes or
assessments, as hereinafter provided.
"Now this indenture witnesseth, that the said party of the
first part, for the better securing the payment of the said
sum of money mentioned in the condition of the said bond,
note or obligation, with interest thereon, and also for and
in consideration of one dollar, paid by the said party of
the second part, the receipt whereof is hereby acknowledged,
doth hereby grant and release unto the said party of the
second part, and to his heirs (or successors) and assigns
for ever (description), together with the appurtenances, and
all the estate and rights of the party of the first part in
and to said premises, together with all fixtures and
articles of personal property attached to, or used in
connection with, the premises. To have and to hold the above
granted premises unto the said party of the second part, his
heirs and assigns forever. Provided, always, that if the
said party of the first part, his heirs, executors or
administrators, shall pay unto the said party of the second
part, his executors, administrators or assigns, the said sum
of money mentioned in the condition of the said bond, note
or obligation, and the interest thereon, at the time and in
the manner mentioned in the said condition, that then these
presents, and the estate hereby granted, shall cease,
determine and be void."
(Explanation: Whatever words are inserted in the blank
spaces above marked (A), (B), (C), (D), (E), (F), (G), (H),
(I), (J), (K), (L), and (M) respectfully, shall be construed
as being inserted in the corresponding blank spaces above
marked (A1), (B1), (C1), (D1), (E1), (F1), (G1), (H1), (I1),
(J1), (K1), (L1) and (M1) respectfully.)
2. Covenant that whole sum shall become due.
A covenant "that the whole of the said principal sum and
interest shall become due at the option of the mortgagee:
after default in the payment of any installment of principal
or of interest for ....... days; or after default in the
payment of any tax, water rate or assessment for .......
days after notice and demand; or after default after notice
and demand either in assigning and delivering the policies
insuring the buildings against loss by fire or in
reimbursing the mortgagee for premiums paid on such
insurance, as hereinbefore provided; or after default upon
request in furnishing a statement of the amount due on the
mortgage and whether any offsets or defenses exist against
the mortgage debt, as hereinafter provided," must be
construed as meaning that should any default be made in the
payment of any installment of principal or of any part
thereof, or in the payment of the said interest, or any part
thereof, on any day whereon the same is made payable, or
should any tax, water rate or assessment, and/or any
installment of any assessment which has been divided into
annual installments pursuant to provision of law in such
cases made and provided which now is or may be hereafter
imposed upon the premises hereinafter described, become due
or payable, and should the said installment of principal or
interest remain unpaid and in arrear for the space of
....... days, or such tax, water rate or assessment or
annual installment remain unpaid and in arrear for .......
days after written notice by the mortgagee or obligee, his
executors, administrators, successors or assigns, that such
tax or assessment and/or annual installment is unpaid, and
demand for the payment thereof, or should any default be
made after notice and demand either in assigning and
delivering the policies insuring the buildings against loss
by fire or in reimbursing the mortgagee for premiums paid on
such insurance, as hereinafter provided, or upon failure to
furnish such statement of the amount due on the mortgage and
whether any offsets or defenses exist against the mortgage
debt, as hereinafter provided, after the expiration of
....... days in case the request is made personally, or
after the expiration of ....... days after the mailing of
such request in case the request is made by mail, then and
from thenceforth, that is to say, after the lapse of either
one of said periods, as the case may be, the aforesaid
principal sum, with all arrearage of interest thereon,
shall, at the option of the said mortgagee or obligee, his
executors, administrators, successors or assigns, become and
be due and payable immediately thereafter, although the
period above limited for the payment thereof may not then
have expired, anything thereinbefore contained to the
contrary thereof in any wise notwithstanding.
3. Covenant to pay indebtedness.
In default of payment, mortgagee to have power to sell. A
covenant "that the mortgagor will pay the indebtedness, as
hereinbefore provided," must be construed as meaning that
the mortgagor for himself, his heirs, executors and
administrators or successors, doth covenant and agree to pay
to the mortgagee, his executors, administrators, successors
and assigns, the principal sum of money secured by said
mortgage, and also the interest thereon as provided by said
mortgage. And if default shall be made in the payment of the
principal sum or the interest that may grow due thereon, or
of any part thereof, or in case of any other default, that
then and from thenceforth it shall be lawful for the
mortgagee, his executors, administrators or successors to
enter into and upon all and singular the premises granted,
or intended so to be, and to sell and dispose of the same,
and all benefit and equity of redemption of the said
mortgagor, his heirs, executors, administrators, successors
or assigns therein, at public auction, according to the act
in such case made and provided, and as the attorney of the
mortgagor for that purpose duly authorized, constituted and
appointed, to make and deliver to the purchaser or
purchasers thereof a good and sufficient deed or deeds of
conveyance for the same in fee simple (or otherwise; as the
case may be) and out of the money arising from such sale, to
retain the principal and interest which shall then be due,
together with the costs and charges of advertisement and
sale of the said premises, rendering the overplus of the
purchase-money, if any there shall be, unto the mortgagor,
his heirs, executors, administrators, successors or assigns,
which sale so to be made shall forever be a perpetual bar
both in law and equity against the mortgagor, his heirs,
successors and assigns, and against all other persons
claiming or to claim the premises, or any part thereof by,
from or under him, them or any of them.
4. Mortgagor to keep buildings insured.
(a) A covenant "that the mortgagor will keep the buildings
on the premises insured against loss by fire for the
benefit of the mortgagee; that he will assign and
deliver the policies to the mortgagee; and that he will
reimburse the mortgagee for any premiums paid for
insurance made by the mortgagee on the mortgagor's
default in so insuring the buildings or in so assigning
and delivering the policies," shall be construed as
meaning that the mortgagor, his heirs, successors and
assigns will, during all the time until the money
secured by the mortgage shall be fully paid and
satisfied, keep the buildings erected on the premises
insured against loss or damage by fire, to an amount to
be approved by the mortgagee not exceeding in the
aggregate one hundred per centum of their full
insurable value and in a company or companies to be
approved by the mortgagee, and will assign and deliver
the policy or policies of such insurance to the
mortgagee, his executors, administrators, successors or
assigns, which policy or policies shall have endorsed
thereon the standard New York mortgagee clause in the
name of the mortgagee, so and in such manner and form
that he and they shall at all time and times, until the
full payment of said moneys, have and hold the said
policy or policies as a collateral and further security
for the payment of said moneys, and in default of so
doing, that the mortgagee or his executors,
administrators, successors or assigns, may make such
insurance from year to year, in an amount in the
aggregate not exceeding one hundred per centum of the
full insurable value of said buildings erected on the
mortgaged premises for the purposes aforesaid, and pay
the premium or premiums therefor, and that the
mortgagor will pay to the mortgagee, his executors,
administrators, successors or assigns, such premium or
premiums so paid, with interest from the time of
payment, on demand, and that the same shall be deemed
to be secured by the mortgage, and shall be collectible
thereupon and thereby in like manner as the principal
moneys, and that should the mortgagee by reason of such
insurance against loss by fire receive any sum or sums
of money for damage by fire, and should the mortgagee
retain such insurance money instead of paying it over
to the mortgagor, the mortgagee's right to retain the
same and his duty to apply it in payment of or on
account of the sum secured by the mortgage and in
satisfaction or reduction of the lien thereof shall be
limited and qualified as hereafter in this paragraph
provided. Said insurance money so received by the
mortgagee shall be held by him as trust funds until
paid over or applied as hereinafter provided. If the
mortgagor shall notify the mortgagee in writing within
thirty days after the fire that the mortgaged premises
have been damaged thereby, and shall thereafter make
good the damage by means of such repairs, restoration
or rebuilding as may be necessary to restore the
buildings to their condition prior to the damage, then
upon presentation to the mortgagee within three years
after the fire of proof that the damage has been fully
made good (and if he so demands in writing within
thirty days after such presentation of proof, then upon
presentation to the mortgagee within thirty days after
such demand of proof also of the actual cost of such
repairs, restoration and rebuilding and of the
reasonable value of any part of the work so performed
by the mortgagor) the mortgagee, unless he rejects the
proof submitted to him as insufficient, shall pay over
to the mortgagor so much of said insurance money
theretofore received by the mortgagee as does not
exceed the lesser of (1) the reasonable cost of such
repairs, restoration and rebuilding or (2) the total
amount actually paid therefor by the mortgagor,
together with the reasonable value of any part of the
work done by him. Such proof shall be deemed sufficient
unless, within sixty days after presentation of all
such proof to the mortgagee as aforesaid, he shall
notify the mortgagor in writing that the proof is
rejected. Any excess of said insurance money over the
amount so payable to the mortgagor shall be applied in
reduction of the principal of the mortgage. Provided,
however, that if and so long as there exists any
default by the mortgagor in the performance of any of
the terms or provisions of the mortgage on his part to
be performed the mortgagee shall not be obligated to
pay over any of said insurance money received by him.
If the mortgagor shall fail to comply with any of the
foregoing provisions within the time or times
hereinabove limited, or shall fail within sixty days
after rejection of the proof so submitted to commence
an action against the mortgagee to recover so much of
said insurance money as is payable to the mortgagor as
hereinabove provided, or if the entire principal of the
mortgage shall have become payable by reason of default
or maturity, the mortgagee shall apply said insurance
money in satisfaction or reduction of the principal of
the mortgage; and any excess of said insurance money
over the amount required to satisfy the mortgage shall
be paid to the mortgagor. Unless the court, in any such
action, shall determine that the mortgagee's rejection
of the proof submitted by the mortgagor prior to the
commencement of the action was unreasonable, the
mortgagee may offset the reasonable amount, as
determined by the court, of his expense incident to the
litigation, and may reimburse himself out of the
insurance money for the amount so determined. The term
"mortgage," as hereinabove used, shall be deemed to
include agreements extending or otherwise in any way
modifying the terms or provisions of an existing
mortgage. The term "mortgagor," as hereinabove used,
shall mean the owner for the time being of the
mortgaged fee or the junior mortgagee actually in
possession of the mortgaged property, or the tenant for
the time being in possession of the property under a
lease which has been mortgaged. The term "mortgagee,"
as hereinabove used, shall be deemed to include the
successors in interest of the mortgagee. In the event
that there be more than one mortgage covering the same
premises, such covenant must be construed as
hereinbefore prescribed in this paragraph, except that
the mortgagor, his heirs, successors and assigns,
notwithstanding such foregoing provisions, may not be
required to provide such insurance, as to all the
mortgagees combined, in the preferential order of their
priority, for a total amount of more than one hundred
per cent of the insurable value of the buildings on the
premises, and a second or subordinate mortgagee shall
be entitled to exercise the rights of a mortgagee with
respect to the procurement of such insurance and the
holding of the policy or policies thereof as
hereinbefore prescribed in this paragraph only when and
to the extent that the mortgagor, his heirs, successors
or assigns, as the case may be, does or do not furnish
satisfactory proof of such maximum insurance for the
benefit of such second or subordinate mortgagee and one
or more other mortgagees in the preferential order of
their priority in a company or companies duly
authorized to do business in this state.
The limitations and qualifications hereinabove imposed
on the mortgagee's right to retain proceeds of a fire
insurance policy shall apply only to mortgages or
extensions or other modifications thereof made after
the effective date of this act.
(b) A covenant "that the mortgagor will keep the buildings
on the premises insured against loss by flood if the
premises are located in an area identified by the
Secretary of Housing and Urban Development as an area
having special flood hazards and in which flood
insurance has been made available under the National
Flood Insurance Act of nineteen hundred sixty-eight;
that he will assign and deliver the policies to the
mortgagee; and that he will reimburse the mortgagee for
any premiums paid for insurance made by the mortgagee
on the mortgagor's default in so insuring the buildings
or in so assigning and delivering the policies," shall
be construed as meaning that the mortgagor, his heirs,
successors and assigns will, during all the time until
the money secured by the mortgage shall be fully paid
and satisfied, keep the buildings erected on the
premises insured against loss or damage by flood
provided the premises are located in an area identified
by the Secretary of Housing and Urban Development of
the United States as an area having special flood
hazards and in which flood insurance is available under
the National Flood Insurance Act of nineteen hundred
sixty-eight, to an amount at least equal to the
outstanding principal balance of the money secured by
the mortgage or the maximum limit of coverage available
with respect to the buildings under said Act, whichever
is less, and in a company or companies to be approved
by the mortgagee and will assign and deliver the policy
or policies of such insurance to the mortgagee, his
executors, administrators, successors or assigns, which
policy or policies shall have endorsed thereon the
standard New York mortgagee clause in the name of the
mortgagee, so and in such manner and form that he and
they shall at all time and times, until the full
payment of said money, have and hold the said policy or
policies as a collateral and further security for the
payment of said money, and in default of so doing, that
the mortgagee or his executors, administrators,
successors or assigns may make such insurance from year
to year, in the amount as aforesaid, and pay the
premium or premiums therefor, and that the mortgagor
will pay to the mortgagee, his executors,
administrators, successors or assigns, such premium or
premiums so paid, with interest from the time of
payment, on demand, and that the same shall be deemed
to be secured by the mortgage, and shall be collectible
thereupon and thereby in like manner as the principal
moneys, and that should the mortgagee by reason of such
insurance receive any sum or sums of money for damage
by flood, the provisions for retention, holding
application and payment of said insurance money shall
be as set forth in paragraph (a) above with respect to
loss by fire. The term "mortgage," as hereinabove used,
shall be deemed to include agreements extending or
otherwise in any way modifying the terms or provisions
of an existing mortgage. The term "mortgagor," as
hereinabove used, shall mean the owner for the time
being of the mortgaged fee or the junior mortgagee
actually in possession of the mortgaged property, or
the tenant for the time being in possession of the
property under a lease which has been mortgaged. The
term "mortgagee," as hereinabove used, shall be deemed
to include the successors in interest of the mortgagee.
In the event that there be more than one mortgage
covering the same premises, such covenant must be
construed as hereinbefore prescribed in this paragraph
except that the mortgagor, his heirs, successors and
assigns, notwithstanding such foregoing provisions, may
not be required to provide such insurance, as to all
the mortgagees combined, in the preferential order of
their priority, for a total amount greater than the
outstanding principal balance of the money secured by
the mortgage or the maximum limit of coverage available
with respect to the premises, whichever is less, and a
second or subordinate mortgagee shall be entitled to
exercise the rights of a mortgagee with respect to the
procurement of such insurance and the holding of the
policy or policies thereof as hereinbefore prescribed
in this paragraph only when and to the extent that the
mortgagor, his heirs, successors or assigns, as the
case may be, does or do not furnish satisfactory proof
of such maximum insurance for the benefit of such
second or subordinate mortgagee and one or more other
mortgagees in the preferential order of their priority
in a company or companies duly authorized to do
business in this state.
The limitations and qualifications hereinabove imposed
on the mortgagee's right to retain proceeds of a flood
insurance policy shall apply only to mortgages or
extensions or other modifications thereof made after
the effective date of this act.
4-a. Mortgagor to maintain premises and all improvements thereon
in good condition or repair.
(a) A covenant contained in a mortgage on real property
improved by a residence for four families or more that
the mortgagor will maintain the premises and all
improvements thereon in "good condition or repair"
shall be construed as meaning that the mortgagor, his
heirs, successors and assigns will, during all the time
until the money secured by the mortgage shall be fully
paid and satisfied, keep the premises and the building
or buildings erected thereon in good condition and
repair and free from violations of applicable municipal
or state laws, codes or regulations concerning the
state of such condition and/or repair. Upon a finding
and certification by any such government or its agency
of a violation of any such law, code or regulation
involving a serious danger to the health and safety of
the occupants of such mortgaged premises and upon the
service of one copy thereof on the owner of record such
mortgagee may declare the entire balance of the
principal sum secured by such mortgage, together with
all accrued interest, immediately due and payable upon
the following conditions: the mortgagee shall allow the
mortgagor a reasonable opportunity to correct the
violation and may commence foreclosure proceedings upon
failure of the mortgagor to make such corrections
within the time period mandated by local law, rule or
code enforcement agency, however, no such action shall
be commenced within thirty days of the expiration of
the period, if any, specified by local law, rule or
code enforcement regulation.
(b) Should any such mortgagee commence a foreclosure
proceeding based upon such violation and not complete
the same because such violation had been cured, the
mortgagee shall be entitled to recover all reasonable
attorney's fees and disbursements incurred in the
bringing of such proceeding.
(c) Notwithstanding the provisions of this section, the
mortgagee and the mortgagor shall retain all existing
interest and rights.
5. Mortgagor to warrant title.
A covenant "that the mortgagor warrants the title to the
premises," must be construed as meaning that the mortgagor
warrants that he has good title to said premises and has a
right to mortgage the same and that the mortgagor shall and
will make, execute, acknowledge and deliver in due form of
law, all such further or other deeds or assurances as may at
any time hereafter be reasonably desired or required for the
more fully and effectually conveying the premises by the
mortgage described, and thereby granted or intended so to
be, unto the said mortgagee, his executors, administrators,
successors or assigns, for the purpose aforesaid, and unto
all and every person or persons, corporation or
corporations, deriving any estate, right, title or interest
therein, under the said indenture of mortgage, or the power
of sale therein contained, and the said granted premises
against the said mortgagor, and all persons claiming through
him will warrant and defend.
6. Mortgagor to pay all taxes, assessments or water rates.
A covenant "that the mortgagor will pay all taxes,
assessments or water rates and in default thereof, the
mortgagee may pay the same" must be construed as meaning
that until the amount hereby secured is paid, the mortgagor
will pay all taxes, assessments and water rates which may be
assessed or become liens on said premises, and in default
thereof the holder of this mortgage may pay the same, and
the mortgagor will repay the same with interest, and the
same shall be liens on said premises and secured by the
mortgage.
7. Statement of amount due.
A covenant "that the mortgagor within...... days upon
request in person or within ...... days upon request by mail
will furnish a written statement duly acknowledged of the
amount due on this mortgage and whether any offsets or
defenses exist against the mortgage debt" must be construed
as meaning that the mortgagor, and any subsequent owner of
the premises described herein upon request, made either
personally or by mail, shall certify, by a writing duly
acknowledged, to the mortgagee or to any proposed assignee
of this mortgage, the amount of principal and interest then
owing on this mortgage and whether any offsets or defenses
exist against the mortgage debt within .... days in case the
request is made personally, or within ...... days after the
mailing of such request in case the request is made by mail.
8. Notice and demand.
A covenant "that notice and demand or request may be made in
writing and may be served in person or by mail" must be
construed as meaning that every provision for notice and
demand or request shall be deemed fulfilled by written
notice and demand or request personally served on one or
more of the persons who shall at the time hold the record
title to the premises, or on their heirs or successors, or
mailed by depositing it in any post-office station or letter-
box, enclosed in a post-paid envelope addressed to such
person or persons, or their heirs or successors, at his,
their or its address to the mortgagee last known.
9. Power of attorney to assignee.
The word "assign" or other words of assignment, when
contained in an assignment of a mortgage and bond or
mortgage and note, must be construed as having included in
their meaning that the assignor does thereby make,
constitute and appoint the assignee the true and lawful
attorney, irrevocable, of the assignor, in the name of the
assignor, or otherwise, but at the proper costs and charges
of the assignee, to have, use and take all lawful ways and
means for the recovery of the money and interest secured by
the said mortgage and bond or mortgage and note, and in case
of payment to discharge the same as fully as the assignor
might or could do if the assignment were not made.
10. Mortgagee entitled to appointment of receiver.
A covenant "that the holder of this mortgage, in any action
to foreclose it, shall be entitled to the appointment of a
receiver," must be construed as meaning that the mortgagee,
his heirs, successors or assigns, in any action to foreclose
the mortgage, shall be entitled, without notice and without
regard to adequacy of any security of the debt, to the
appointment of a receiver of the rents and profits of the
premises covered by the mortgage; and the rents and profits
in the event of any default or defaults in paying the
principal, interest, taxes, water rents, assessments or
premiums of insurance, are assigned to the holder of the
mortgage as further security for the payment of the
indebtedness.
Sec. 254-a. Right of election of mortgagee in certain cases.
If a bond or note, or the mortgage on real property, improved by
a one to six family residence occupied by the owner, securing the
payment of same, contains (1) a provision whereby the mortgagee
retains the right to accelerate the due date for payment of the
balance of principal upon a transfer or sale of such real
property or by alienation of title of such real property due to
an act or operation of law, and (2) a provision for payment of
any charge, however denominated, in the nature of a prepayment
fee and if a mortgagor sells or transfers his property or if
title to the mortgaged property is transferred by act or
operation of law and the purchaser requests permission to assume
the mortgage or take the mortgaged premises subject to the
mortgage, but the mortgagee does not consent to such request and
thereby necessitates prepayment of the mortgage, the mortgagee
shall not levy a prepayment fee; provided, however, that the
provisions of this section shall not apply to the extent such
provisions are inconsistent with any federal law or regulation.
Sec. 254-b. Limitation on late charges.
1. If a bond or note, or the mortgage on real property,
heretofore or hereafter made, improved by a one to six
family residence occupied by the owner, securing the payment
of same, or a note representing a loan for the purpose of
financing the purchase of an ownership interest in, and
proprietary lease from, a corporation or partnership formed
for the purpose of the cooperative ownership of residential
real estate, contains a provision whereby the mortgagee or
lender retains the right to collect a late charge on any
installment which has become due and remains unpaid, such
charge on any such delinquent installment, regardless of the
period it remains in default, shall not exceed and shall
only be enforced to the extent of two percent of such
delinquent installment; provided, however, that no charge
shall be imposed on any installment paid within fifteen days
after the due date. No such late charge shall be deducted
from any regular installment payment by the mortgagor or
borrower, but shall be separately charged and collected by
the mortgagee or lender. In the absence of a specific
provision in a bond, note or mortgage no late charge on any
delinquent installment shall be assessed or collected. The
term "installment" shall include amounts representing
interest, amortization of principal and payments in respect
of insurance premiums, taxes and utility charges if the
bond, note or mortgage provides for collection thereof by
the mortgagee.
2. The provisions in this section shall not apply to any loan
or forbearance insured by the federal housing commissioner
or for which a commitment to insure has been made by the
federal housing commissioner or to any loan or forbearance
insured or guaranteed pursuant to the provisions of an act
of congress entitled "Servicemen's Readjustment Act of
1944", or to the extent the provisions of this section are
inconsistent with any other federal law or regulation.
3. If any provision of this section, or the application of such
provision to any individual, company, corporation, or
circumstance, shall be held invalid, the remainder of this
Section, and the application of such section to individuals,
companies, corporations, or circumstances other than those
to which it is held invalid, shall not be affected thereby.
Sec. 254-c. Right to a copy of real property appraisals and
consumer reports in certain cases.
1. Any lender who requires an applicant for a loan or
forbearance, which is to be secured primarily by an interest
in real property improved by a one to six family residence,
to bear the cost of either an appraisal of said property or
the cost of obtaining a consumer report subject to the
provisions of article twenty-five of the general business
law as a condition to the processing of the application or
the granting of the loan or forbearance, shall, upon the
written request of such applicant, provide to him a copy of
said appraisal or consumer report as the case may be, at no
additional cost.
2. "Lender" as used in this section shall mean and include any
bank, trust company, national bank, savings bank, federal
mutual savings bank, savings and loan association, federal
savings and loan association, private banker, credit union,
federal credit union, investment company, insurance company,
pension fund, mortgage banker or any other entity.
3. "One to six family residence" as used in this section shall
mean property, including that held in condominium form, used
primarily for residential purposes for one to six families
and located in the state.
4. If any provision of this section, or the application of such
provision to any individual, company, corporation or
circumstance, shall be held invalid, the remainder of this
section, and the application of such section to individuals,
companies, corporations, or circumstances other than those
to which it is held invalid, shall not be affected thereby.
Sec. 254-d. Fees by mortgagee for direct payment of real
property taxes by mortgagor prohibited.
No mortgagor on a loan secured primarily by an interest in real
property shall be charged a fee by the mortgagee because the
parties have agreed that the mortgagor shall pay real property
taxes on such real property directly to the taxing authority or
authorities and not in escrow to the mortgagee or the mortgagee's
agent.
Sec. 255. Construction of grant of appurtenances and of all
the rights and estate of grantor.
In any grant or mortgage of freehold interests in real estate,
the words, "together with the appurtenances and all the estate
and rights of the grantor in and to said premises," must be
construed as meaning, together with all and singular the
tenements, hereditaments and appurtenances thereunto belonging,
or in anywise appertaining, and the reversion and reversions,
remainder and remainders, rents, issues and profits thereof, and
also all the estate, right, title, interest, dower and right of
dower, curtesy and right of curtesy, property, possession, claim
and demand whatsoever, both in law and in equity, of the said
grantor of, in and to the said granted premises and every part
and parcel thereof, with the appurtenances.
Sec. 256. Construction of grant in executor's or trustee's
deed of appurtenances, and of the estate of
testator and grantor.
In any deed by an executor of, or trustee under a will, the words
"together with the appurtenances and also all the estate which
the said testator had at the time of his decease in said
premises, and also the estate therein which said grantor has or
has power to convey or dispose of, whether individually or by
virtue of said will or otherwise," must be construed as meaning,
together with all and singular the tenements, hereditaments and
appurtenances thereunto belonging, or in anywise appertaining,
and the reversion and reversions, remainder and remainders,
rents, issues and profits thereof; and also all the estate,
right, title, interest, property, possession, claim and demand
whatsoever, both in law and equity, which the said testator had
in his lifetime, and at the time of his decease, or which the
said grantor has or has power to convey or dispose of, whether
individually or by virtue of the said last will and testament or
otherwise, of, in and to the said granted premises, and every
part and parcel thereof, with the appurtenances.
Sec. 257. Covenants bind representatives of grantor and
mortgagor and inure to the benefit of whom.
All covenants contained in any grant or mortgage of real estate
bind the heirs, executors, administrators, successors and
assigns, of the grantor or mortgagor, and inure to the benefit of
the heirs, executors, administrators, successors and assigns of
the grantee or mortgagee in the same manner and to the same
extent, and with like effect as if such heirs, executors,
administrators, successors and assigns were so named in such
covenants, unless otherwise in said grant or mortgage expressly
provided.
Sec. 258. Short forms of deeds and mortgages.
The use of the following forms of instruments for the conveyance
and mortgage of real property is lawful, but this section does
not prevent or invalidate the use of other forms:
***********
SCHEDULE A.
DEED WITH FULL COVENANTS. Statutory Form A.
(Individual)
This indenture, made the ....... day of ....... nineteen hundred
and ......., between ....... (insert residence) party of the
first part, and ....... (insert residence) party of the second
part,
Witnesseth, that the party of the first part, in consideration of
....... dollars, lawful money of the United States, paid by the
party of the second part, does hereby grant and release unto the
party of the second part, ....... and assigns forever, all
....... (description), together with the appurtenances and all
the estate and rights of the party of the first part in and to
said premises.
To have and to hold the premises herein granted unto the party of
the second part, ....... and assigns forever. And said .......
covenants as follows:
First. That said ....... is seized of said premises in fee
simple, and has good right to convey the same;
Second. That the party of the second part shall quietly
enjoy the said premises;
Third. That the said premises are free from incumbrances;
Fourth. That the party of the first part will execute or
procure any further necessary assurance of the title to said
premises;
Fifth. That said ....... will forever warrant the title to
said premises.
In witness whereof, the party of the first part has hereunto set
his hand and seal the day and year first above written.
In presence of:
***********
SCHEDULE B.
DEED WITH FULL COVENANTS. Statutory Form AA.
(Corporation)
This indenture, made the ....... day of ......., nineteen hundred
and ......., between ......., a corporation organized under the
laws of ......., party of the first part, and ....... (insert
residence), party of the second part:
Witnesseth, that the party of the first part, in consideration of
....... dollars, lawful money of the United States, paid by the
party of the second part, does hereby grant and release unto the
party of the second part, ....... and assigns forever, all
....... (description), together with the appurtenances and all
the estate and rights of the party of the first part in and to
said premises,
To have and to hold the premises herein granted unto the party of
the second part, ....... and assigns forever. And the party of
the first part covenants as follows:
First. That the party of the first part is seized of the
said premises in fee simple, and has good right to convey
the same;
Second. That the party of the second part shall quietly
enjoy the said premises;
Third. That the said premises are free from incumbrances;
Fourth. That the party of the first part will execute or
procure any further necessary assurance of the title to said
premises;
Fifth. That the party of the first part will forever warrant
the title to said premises.
In witness whereof, the party of the first part has caused its
corporate seal to be hereunto affixed, and these presents to be
signed by its duly authorized officer the day and year first
above written.
***********
SCHEDULE C.
BARGAIN AND SALE DEED. Statutory Form B. Without Covenant against
Grantor.
(Individual)
This indenture, made the ....... day of ......., nineteen hundred
and ......., between ......., (insert residence) party of the
first part, and ......., (insert residence) party of the second
part:
Witnesseth, that the party of the first part, in consideration of
....... dollars, lawful money of the United States, paid by the
party of the second part, does hereby grant and release unto the
party of the second part, ....... and assigns forever, all
....... (description), together with the appurtenances and all
the estate and rights of the party of the first part in and to
said premises,
To have and to hold the above granted premises unto the party of
the second part, ....... and assigns forever.
In witness whereof, the party of the first part has hereunto set
his hand and seal the day and year first above written.
In presence of:
***********
SCHEDULE D.
BARGAIN AND SALE DEED. Statutory Form BB. Without Covenant
against Grantor.
(Corporation)
This indenture, made the ....... day of ......., nineteen hundred
and ......., between ......., a corporation organized under the
laws of ......., party of the first part, and ....... (insert
residence), party of the second part:
Witnesseth, that the party of the first part, in consideration of
....... dollars, lawful money of the United States, paid by the
party of the second part, does hereby grant and release unto the
party of the second part, ....... and assigns forever, all
....... (description), together with the appurtenances and all
the estate and rights of the party of the first part in and to
said premises,
To have and to hold the premises herein granted unto the party of
the second part, ....... and assigns forever.
In witness whereof, the party of the first part has caused its
corporate seal to be hereunto affixed, and these presents to be
signed by its duly authorized officer the day and year first
above written.
***********
SCHEDULE E.
BARGAIN AND SALE DEED. Statutory Form C. With Covenant against
Grantor.
(Individual)
This indenture, made the ....... day of ......., nineteen hundred
and......., between ......., (insert residence), party of the
first part, and ......., (insert residence), party of the second
part:
Witnesseth, that the party of the first part, in consideration of
....... dollars, lawful money of the United States, paid by the
party of the second part, does hereby grant and release unto the
party of the second part, his heirs and assigns forever, all
....... (description), together with the appurtenances and all
the estate and rights of the party of the first part in and to
said premises.
To have and to hold the premises herein granted unto the party of
the second part, his heirs and assigns forever. And the party of
the first part covenants that he has not done or suffered
anything whereby the said premises have been incumbered in any
way whatever.
In witness whereof, the party of the first part has hereunto set
his hand and seal the day and year first above written.
In presence of:
***********
SCHEDULE F.
BARGAIN AND SALE DEED. Statutory Form CC. With Covenant against
Grantor.
(Corporation)
This indenture, made the ....... day of ......., nineteen hundred
and ......., between ......., a corporation organized under the
laws of ......., party of the first part, and ......., (insert
residence), party of the second part:
Witnesseth, that the party of the first part, in consideration of
....... dollars, lawful money of the United States, paid by the
party of the second part, does hereby grant and release unto the
party of the second part, ....... and assigns forever, all
....... (description), together with the appurtenances and all
the estate and rights of the party of the first part in and to
said premises.
To have and to hold the premises herein granted unto the party of
the second part, ....... and assigns forever. And the party of
the first part covenants that it has not done or suffered
anything whereby the said premises have been incumbered in any
way whatever.
In witness whereof, the party of the first part has caused its
corporate seal to be hereunto affixed and these presents to be
signed by its duly authorized officer the day and year first
above written.
***********
SCHEDULE G.
QUITCLAIM DEED. Statutory Form D.
(Individual)
This indenture, made the ....... day of ......., nineteen hundred
and ......., between ......., (insert residence), party of the
first part, and......., (insert residence), party of the second
part:
Witnesseth, that the party of the first part, in consideration of
......dollars, lawful money of the United States, paid by the
party of the second part, does hereby remise, release, and
quitclaim unto the party of the second part,......and assigns
forever, all (description),together with the appurtenances and
all the estate and rights of the party of the first part in and
to said premises.
To have and to hold the premises herein granted unto the party of
the second part,.....and assigns forever.
In witness whereof, the party of the first part has hereunto set
his hand and seal the day and year first above written.
In presence of:
***********
SCHEDULE H.
QUITCLAIM DEED. Statutory Form DD.
(Corporation)
This indenture, made the ......day of.......,nineteen hundred and
......,between......,a corporation organized under the laws
of......., party of the first part, and ....... (insert
residence), party of the second part:
Witnesseth, that the party of the first part, in consideration of
....... dollars, lawful money of the United States, paid by the
party of the second part, does hereby remise, release and
quitclaim unto the party of the second part, his heirs and
assigns forever, all ....... (description), together with the
appurtenances and all the estate and rights of the party of the
first part in and to said premises.
To have and to hold the premises herein granted unto the party of
the second part, his heirs and assigns forever.
In witness whereof, the party of the first part has caused its
corporate seal to be hereunto affixed and these presents to be
signed by its duly authorized officer the day and year first
above written.
***********
SCHEDULE I.
EXECUTOR'S DEED. Statutory Form E.
This indenture, made the ....... day of ......., nineteen hundred
and ......., between ....... as executor of ....... the last will
and testament of ......., late of ......., deceased, party of the
first part, and ......., (insert residence) party of the second
part:
Witnesseth, that the party of the first part, by virtue of the
power and authority to him given in and by the said last will and
testament, and in consideration of ..... dollars, lawful money of
the United States, paid by the party of the second part, does
hereby grant and release unto the party of the second part,
....... his heirs and assigns forever, all ....... (description),
together with the appurtenances, and also all the estate which
the said testator had at the time of his decease in said
premises, and also the estate therein, which the party of the
first part has or has power to convey or dispose of, whether
individually, or by virtue of said will or otherwise.
To have and to hold the premises herein granted unto the party of
the second part, ....... and assigns forever.
And the party of the first part covenants that he has not done or
suffered anything whereby the said premises have been incumbered
in any way whatever.
In witness whereof, the party of the first part has hereunto set
his hand and seal the day and year first above written.
In presence of:
***********
SCHEDULE J.
REFEREE'S DEED IN FORECLOSURE. Statutory Form F.
This deed, made the ....... day of ......., nineteen hundred and
......., between ......., referee duly appointed in the action
hereinafter mentioned, grantor, and ....... (insert residence),
grantee:
Witnesseth, that the grantor, the referee appointed in an action
between ......., plaintiffs, and ......., defendants, foreclosing
a mortgage recorded on the ....... day of ......., in the office
of the ....... of the county of ......., in liber ....... of
mortgages, at page ......., in pursuance of a judgment entered at
a special term of the ......., on the ....... day of ......., and
in consideration of ....... dollars paid by the grantee, being
the highest sum bid at the sale under said judgment, does hereby
grant and convey unto the grantee, all (description),
To have and to hold the premises herein granted unto the grantee,
....... and assigns forever.
In witness whereof, the grantor has hereunto set his hand and
seal.
In presence of:
***********
SCHEDULE K.
REFEREE'S DEED IN PARTITION. Statutory Form G.
This deed, made the ....... day of ......., nineteen hundred and
......., between ......., referee duly appointed in the action
hereinafter mentioned, grantor, and ......., (insert residence),
grantee:
Witnesseth, that the grantor, the referee appointed in an action
in partition between ......., plaintiffs, and .......,
defendants, in pursuance of a judgment entered at a special term
of the ......., on the ....... day of ......., and in
consideration of ....... dollars paid by the grantee, being the
highest sum bid at the sale under said judgment, does hereby
grant and convey unto the grantee all (description),
To have and to hold the premises herein granted unto the grantee,
....... and assigns forever.
In witness whereof, the grantor has hereunto set his hand and
seal.
In presence of:
***********
SCHEDULE L.
ASSIGNMENT OF LEASE. Statutory Form H.
Know that ......., assignor, in consideration of ....... dollars,
paid by ......., assignee, hereby assigns unto the assignee, a
certain lease made by ......., to ......., dated the ....... day
of ......., and recorded on the ....... day of ......., in the
office of the ....... of the county of ......., in liber .......
of conveyances, at page ......., covering premises .......,
together with the premises therein described, and the buildings
thereon, with the appurtenances,
To have and to hold the same unto the assignee, ....... and
assigns, from the ....... day of ......., nineteen hundred and
......., for all the rest of ....... years mentioned in the said
lease, subject to the rents, covenants, conditions and provisos
therein also mentioned.
And the assignor hereby covenants that the said assigned premises
are free from incumbrances.
In witness whereof, the assignor has hereunto set his hand and
seal this ....... day of ......., nineteen hundred and .......
In presence of:
***********
SCHEDULE M
MORTGAGE Statutory Form M.
This mortgage, made the ......day of......, nineteen hundred
and........,between......, (insert residence) the mortgagor,
and......(insert residence), the mortgagee.
Witnesseth, that to secure the payment of an indebtedness in the
sum of ....... dollars, lawful money of the United States, to be
paid on the ....... day of ......., nineteen hundred and .......,
with interest thereon to be computed from ......., at the rate of
....... per centum per annum, and to be paid ......., according
to a certain bond or obligation bearing even date herewith, the
mortgagor hereby mortgages to the mortgagee (description).
And the mortgagor covenants with the mortgagee as follows:
1. That the mortgagor will pay the indebtedness as hereinbefore
provided.
2. That the mortgagor will keep the buildings on the premises
insured against loss by fire for the benefit of the
mortgagee; that he will assign and deliver the policies to
the mortgagee; and that he will reimburse the mortgagee for
any premiums paid for insurance made by the mortgagee on the
mortgagor's default in so insuring the buildings or in so
assigning and delivering the policies.
3. That no building on the premises shall be removed or
demolished without the consent of the mortgagee.
4. That the whole of said principal sum and interest shall
become due at the option of the mortgagee: after default in
the payment of any installment of principal or of interest
for ....... days; or after default in the payment of any
tax, water rate or assessment for ....... days after notice
and demand; or after default after notice and demand either
in assigning and delivering the policies insuring the
buildings against loss by fire or in reimbursing the
mortgagee for premiums paid on such insurance, as
hereinbefore provided; or after default upon request in
furnishing a statement of the amount due on the mortgage and
whether any offsets or defenses exist against the mortgage
debt, as hereinafter provided.
5. That the holder of this mortgage, in any action to foreclose
it, shall be entitled to the appointment of a receiver.
6. That the mortgagor will pay all taxes, assessments or water
rates, and in default thereof, the mortgagee may pay the
same.
7. That the mortgagor within ....... days upon request in
person or within ....... days upon request by mail will
furnish a written statement duly acknowledged of the amount
due on this mortgage and whether any offsets or defenses
exist against the mortgage debt.
8. That notice and demand or request may be in writing and may
be served in person or by mail.
9. That the mortgagor warrants the title to the premises.
In witness whereof this mortgage has been duly executed by the
mortgagor.
In presence of:
***********
SCHEDULE N
BOND AND MORTGAGE Statutory Form MN.
This bond and mortgage, made the ....... day of ......., nineteen
hundred and ............, between ..................... (insert
residence), herein referred to as the mortgagor, and ...........,
(insert residence) herein referred to as the mortgagee.
Witnesseth, that the mortgagor, do hereby acknowledge ....... to
be indebted to the mortgagee in the sum of ....... dollars,
lawful money of the United States, which the mortgagor do hereby
agree and bind ....... to pay to the mortgagee ....... on the
....... day of ......., nineteen hundred and ......., with
interest thereon to be computed from ......., at the rate of ....
per centum per annum, and to be paid ............................
(insert terms of payment of interest and/or principal) and to
secure the payment of which the mortgagor hereby mortgages to the
mortgagee ...................................................
(description)
And the mortgagor covenants with the mortgagee as follows:
1. That the mortgagor will pay the indebtedness as hereinbefore
provided.
2. That the mortgagor will keep the buildings on the premises
insured against loss by fire for the benefit of the
mortgagee; that he will assign and deliver the policies to
the mortgagee; and that he will reimburse the mortgagee for
any premiums paid for insurance made by the mortgagee on the
mortgagor's default in so insuring the buildings or in so
assigning and delivering the policies.
3. That no building on the premises shall be removed or
demolished without the consent of the mortgagee.
4. That the whole of said principal sum and interest shall
become due at the option of the mortgagee: after default in
the payment of any installment of principal or of interest
for ....... days; or after default in the payment of any
tax, water rate or assessment for ........ days after notice
and demand; or after default after notice and demand either
in assigning and delivering the policies insuring the
buildings against loss by fire or in reimbursing the
mortgagee for premiums paid on such insurance, as
hereinbefore provided; or after default upon request in
furnishing a statement of the amount due on the bond and
mortgage and whether any offsets or defenses exist against
the mortgage debt, as hereinafter provided.
5. That the holder of this bond and mortgage, in any action to
foreclose the mortgage, shall be entitled to the appointment
of a receiver.
6. That the mortgagor will pay all taxes, assessments or water
rates, and in default thereof, the mortgagee may pay the
same.
7. That the mortgagor within ....... days upon request in
person or within ....... days upon request by mail will
furnish a written statement duly acknowledged of the amount
due on this bond and mortgage and whether any offsets or
defenses exist against the mortgage debt.
8. That notice and demand or request may be in writing and may
be served in person or by mail.
9. That the mortgagor warrants the title to the premises.
In witness whereof this bond and mortgage has been duly signed
and sealed by the mortgagor.
In the presence of:
***********
SCHEDULE O.
ASSIGNMENT OF MORTGAGE. Statutory Form I.
Without Covenant.
Know that ......., assignor, in consideration of ....... dollars,
paid by ........, assignee, hereby assigns unto the assignee, a
certain mortgage made by ........, given to secure payment of the
sum of ....... dollars and interest, dated the ....... day of
......., recorded on the ....... day of ......., in the office of
the ....... of the county of ......., in liber ....... of
mortgages, at page ......., covering premises ......., together
with the bond or obligation described in said mortgage, and the
moneys due and to grow due thereon with the interest,
To have and to hold the same unto the assignee, and to the
successors, legal representatives and assigns of the assignee
forever.
In witness whereof, the assignor has hereunto set his hand and
seal this ....... day of ......., nineteen hundred and ........
In presence of:
***********
SCHEDULE P
ASSIGNMENT OF MORTGAGE Statutory form J.
With covenant
Know that ......., assignor, in consideration of ....... dollars,
paid by ......., assignee, hereby assigns unto the assignee, a
certain mortgage made by ......., given to secure payment of the
sum of ....... dollars and interest, dated the ....... day of
......., recorded on the ....... day of ......., in the office of
the ....... of the county of ......., in liber ....... of
mortgages, at page ......., covering premises ......., together
with the bond or obligation described in said mortgage, and the
moneys due and to grow due thereon with the interest,
To have and to hold the same unto the assignee, and to the
successors, legal representatives and assigns of the assignee
forever.
And the assignor covenants that there is now owing upon said
mortgage, without offset or defense of any kind, the principal
sum of ....... dollars, with interest thereon at ....... per
centum per annum from the ....... day of ......., nineteen
hundred and ........
In witness whereof, the assignor has hereunto set his hand and
seal this ....... day of ......., nineteen hundred and ....... In
presence of:
***********
SCHEDULE Q
RELEASE OF PART OF MORTGAGED PREMISES Statutory form K.
This indenture, made the ....... day of ......., nineteen hundred
and ......., between ......., party of the first part, and
......., party of the second part,
Whereas, ....... by indenture of mortgage, bearing date the
....... day of ......., nineteen hundred and ......., recorded in
the office of the ....... of the county of ......., in liber
....... of mortgages, of section ......., page ......., on the
....... day of ......., nineteen hundred and ......., for the
consideration therein mentioned, and to secure the payment of the
money therein specified, did mortgage certain lands and tenements
of which the lands hereinafter described are part, unto .......,
And whereas, the party of the first part, at the request of the
party of the second part, has agreed to give up and surrender the
lands hereinafter described unto the party of the second part,
and to hold and retain the residue of the mortgaged lands as
security for the money remaining due on said mortgage,
Now this indenture witnesseth, that the party of the first part,
in pursuance of said agreement, and in consideration of .......
dollars, lawful money of the United States, ....... paid by the
party of the second part, does grant, release and quitclaim unto
the party of the second part, all that part of said mortgaged
lands described as follows: ..................... (description),
Together with the hereditaments and appurtenances thereunto
belonging, and all the right, title and interest of the party of
the first part, of, in and to the same, to the intent that the
lands hereby released may be discharged from said mortgage, and
that the rest of the land in said mortgage specified may remain
mortgaged to the party of the first part as heretofore,
To have and to hold the lands and premises hereby released and
quitclaimed to the party of the second part, ....... and assigns,
to ....... and their own proper use, benefit and behoof forever,
free, clear and discharged of and from all lien and claim under
and by virtue of the indenture of mortgage aforesaid.
In witness whereof, the party of the first part has signed and
sealed these presents the day and year first above written. In
presence of:
***********
SCHEDULE R.
SATISFACTION OF MORTGAGE. Statutory Form L.
Know all men by these presents, that ....... do hereby certify
that a certain indenture of mortgage, bearing date the .......
day of ......., nineteen hundred and ......., made and executed
by ......., to secure payment of the principal sum of .......
dollars and interest, and duly recorded in the office of the
....... of the county of ......., in liber ....... of mortgages,
of section ......., page ......, on the ....... day of .......,
nineteen hundred and ......., is paid, and do hereby consent that
the same be discharged of record.
Dated the ....... day of ......., nineteen hundred and ........
In presence of:
Sec. 259-c. Provision in lease of real property for waiver of
trial by jury in actions for personal injury or
property damage.
Any provision in a lease, executed after the effective date of
this act, that a trial by jury is waived in any action,
proceeding or counterclaim brought by either of the parties
thereto against the other in any action for personal injury or
property damage, is null and void.
Sec. 260. Lands adversely held may be conveyed or mortgaged.
No grant, conveyance or mortgage of real property or interest
therein shall be void for the reason that at the time of the
delivery thereof such real property is in the actual possession
of a person claiming under a title adverse to that of the
grantor.
Sec. 261. Maintenance of telegraph or other electric wires
raises no presumption of grant.
Whenever any wire or cable used for any telegraph, telephone,
electric light or other electric purpose, or for the purpose of
communication otherwise than by the aid of electricity, is or
shall be attached to, or does or shall extend upon or over any
building or land, no lapse of time whatever shall raise a
presumption of any grant of, or justify a prescription of any
perpetual right to, such attachment or extension.
Sec. 265. Fraudulent intent, question of fact.
The question of fraudulent intent in a case arising under this
article, shall be deemed a question of fact and not of law; and a
conveyance or charge shall not be adjudged fraudulent as against
creditors, purchasers or incumbrancers, solely on the ground that
it was not founded on a valuable consideration.
Sec. 266. Rights of purchaser or incumbrancer for valuable
consideration protected.
This article does not in any manner affect or impair the title of
a purchaser or incumbrancer for a valuable consideration, unless
it appears that he had previous notice of the fraudulent intent
of his immediate grantor, or of the fraud rendering void the
title of such grantor.
Sec. 267. Conveyances with power to revoke, determine or
alter.
A conveyance of, or charge on, an estate or interest in real
property, containing a provision for the revocation,
determination or alteration of the estate or interest, or any
part thereof, at the will of the grantor, is void, as against
subsequent purchasers and incumbrancers, from the grantor, for a
valuable consideration, of any estate or interest so liable to be
revoked or determined, although the same be not expressly
revoked, determined or altered by the grantor, by virtue of the
power reserved or expressed in the prior conveyance or charge.
Where a power to revoke a conveyance of real property or the
rents and profits thereof, and to reconvey the same, is given to
any person, other than the grantor in such conveyance, and such
person thereafter conveys the same real property, rents or
profits to a purchaser or incumbrancer for a valuable
consideration, such subsequent conveyance is valid, in the same
manner and to the same extent as if the power of revocation were
recited therein, and the intent to revoke the former conveyance
expressly declared. If a conveyance to a purchaser or
incumbrancer, under this section, be made before the person
making it is entitled to execute his power of revocation, it is
nevertheless valid, from the time the power of revocation
actually vests in such person, in the same manner, and to the
same extent, as if then made.
Sec. 268. Disaffirmance of fraudulent act by executor and
others.
An executor, administrator, receiver, assignee or other trustee,
may, for the benefit of creditors, or of others interested in
real property held in trust, disaffirm, treat as void and resist
any act done or transfer or agreement made in fraud of the rights
of any creditor, including himself, interested in such estate or
property; and a person who fraudulently receives, takes, or in
any manner interferes with the real property of a deceased
person, or an insolvent corporation, association, partnership, or
individual, is liable to such executor, administrator, receiver
or other trustee for the same, or the value thereof, and for all
damages caused by such act to the trust estate. A creditor of a
deceased insolvent debtor, having a claim or demand exceeding one
hundred dollars against such deceased, may, for the benefit of
creditors or others interested in the real property of such
deceased, disaffirm, treat as void, and resist any act done or
conveyance, transfer or agreement made by such deceased in fraud
of the rights of any creditor, including himself, and may
maintain an action to set aside such act, conveyance, transfer or
agreement, without having first obtained a judgment on such claim
or demand; but the same, if disputed, may be established on the
trial. The judgment in such action may provide for the sale of
the premises or property involved, when a conveyance or transfer
thereof is set aside, and that the proceeds thereof be brought
into court or paid into the proper surrogate's court to be
administered according to law.
Sec. 269. When remainderman may pay interest owed by life
tenant.
Whenever real property held by any person for life is incumbered
by mortgage or other lien, the interest on which should be paid
by the life tenant, and such life tenant neglects or refuses to
pay such interest, the remainderman may pay such interest, and
recover the amount thereof, together with interest thereon from
the time of such payment, of the life tenant.
Sec. 270. Powers of courts of equity not abridged.
Nothing contained in this article abridges the powers of courts
of equity to compel the specific performance of agreements in
cases of part performance.
Sec. 271. Construction of covenants in mortgages on leases
of real property and bonds or notes.
In mortgages on leases of real property and in bonds or notes
secured thereby, the following or similar covenants or agreements
must be construed as follows:
1. In default of payment, mortgagee to have power to sell.--- A
covenant that the mortgagor "will pay the indebtedness, as
provided in the mortgage, and if default be made in the
payment of any part thereof, the mortgagee or obligee shall
have power to sell the premises therein described, according
to law," must be construed as meaning that the mortgagor or
obligor shall well and truly pay unto the mortgagee or
obligee the said sum of money mentioned in the condition of
the said bond, note or obligation, and the interest thereon,
according to the condition of the said bond, note or
obligation. And if default shall be made in the payment of
the said sum of money therein mentioned, or in the interest
which shall accrue thereon, or of any part of either, that
then and from thenceforth it shall be lawful for the said
mortgagee or obligee, his legal representative or assigns,
to sell, transfer and set over, all the rest, residue and
remainder of the said term of years then yet to come, and
all other, the right, title and interest of the said
mortgagor or obligor of, in and to the same, at public
auction, according to the act in such case made and
provided. And as the attorney of the said mortgagor or
obligor for that purpose by these presents duly authorized,
constituted and appointed, to make, seal, execute and
deliver to the purchaser or purchasers thereof, a good and
sufficient assignment, transfer or other conveyance in the
law, for the said premises, with the appurtenances; and out
of the money arising from such sale, to retain the principal
and interest which shall then be due on the said bond, note
or obligation, together with the costs and charges of
advertisement and sale of the said premises, rendering the
overplus of the purchase-money (if any there shall be) unto
the said mortgagor or obligor, his legal representatives or
assigns; which sale, so to be made, shall forever be a
perpetual bar, both in law and equity, against the said
mortgagor or obligor, and against all persons claiming or to
claim the premises or any part thereof, by, from or under
him or them, or any of them.
2. Mortgagor to keep buildings insured.--- A covenant "that the
mortgagor will keep the buildings on the said premises
insured against loss by fire, for the benefit of the
mortgagee," must be construed as meaning that the said
mortgagor or obligor shall and will keep the buildings
erected and to be erected upon the lands above conveyed,
insured against loss and damage by fire, by insurance, and
in an amount approved by the said mortgagee or obligee and
his assigns, and either assign the policy and certificates
thereof or have such insurance made payable to the said
mortgagee or obligee or his assigns, and in default thereof
it shall be lawful for the said mortgagee or obligee and his
assigns to effect such insurance, and the premium and
premiums paid for effecting the same shall be a lien on the
said mortgaged premises, added to the amount of the said
bond, note or obligation, and secured by these presents, and
payable on demand, with legal interest.
3. Mortgagor to pay rent and charges on premises.--- A covenant
that the mortgagor "will pay the rent and other charges
mentioned in and made payable by said indenture of lease
within ....... days after said rent or charges are payable,"
must be construed as meaning that the said mortgagor or
obligor and his legal representatives and assigns, will pay
or cause to be paid, and discharge all rent and rents
mentioned in and made payable by the indenture of lease
aforesaid, and also all taxes, assessments or other charges
that now are a lien, or hereafter shall or may be levied,
assessed or imposed and become a lien upon the premises
above described or any part thereof; and in default thereof,
for the space of ....... after such taxes or assessments or
....... after the said rent or rents, or any of them shall
have become due and payable by the terms of said lease or by
law, then and in each and every such case the said mortgagee
or obligee, his legal representatives or assigns may, at
option, and without notice, pay such rent or rents, taxes,
assessments or other charges and expenses, and the amount so
paid, and interest thereon, from the time of such payment,
shall forthwith be due and payable from the said mortgagor
or obligor, his legal representatives or assigns, to the
said mortgagee or obligee, his legal representatives or
assigns, and shall be deemed to be secured by these
presents, and shall be collectable in the same manner, and
at the same time, and upon the same conditions as the
interest then next maturing upon the principal sum
hereinbefore mentioned.
4. Agreement that whole sum shall become due.--- The words "And
it is hereby expressly agreed that the whole of the said
principal sum shall become due at the option of said
mortgagee or obligee after default in the payment of any
installment of principal or after default in the payment of
interest for ....... days, or after default in the payment
of any rent or other charge made payable by said indenture
of lease for ........ days, or after default in the payment
of any tax or assessment for ....... days after notice and
demand," must be construed as meaning that should any
default be made in the payment of any installment of
principal or any part thereof, or of said interest or any
part thereof, or of any rent or other charge made payable by
said indenture or lease, on any day whereon the same is made
payable, or should any tax or assessment, which now is or
may be hereafter imposed upon the premises hereinafter
described, become due and payable, and should the said
interest, rent or other charge aforesaid, remain unpaid and
in arrear for the space of ....... days, or such tax or
assessment remain unpaid and in arrear for ....... days
after written notice by the mortgagee or obligee, his
executors, administrators or assigns, that such tax or
assessment is unpaid, and demand for the payment thereof,
then and from thenceforth, that is to say, after the lapse
of either one of said periods, as the case may be, the
aforesaid principal sum, with all arrearage of interest
thereon, rent and other charges paid by the mortgagee or
obligee, shall, at the option of the said mortgagee or
obligee, his executors, administrators or assigns, become
and be due and payable immediately thereafter, although the
period above limited for the payment thereof may not then
have expired, anything thereinbefore contained to the
contrary thereof in anywise notwithstanding.
Sec. 272. Construction of grant of appurtenances, and all of
the rights and estate of the mortgagor.
In any mortgage on a lease of real property the words "together
with the appurtenances and all the estate and rights of the part
...... of the first part of, in and to said premises under and by
virtue of the aforesaid indenture of lease," must be construed as
meaning, together with all and singular the edifices, buildings,
rights, members, privileges and appurtenances thereunto belonging
or in anywise appertaining; and also all the estate, right,
title, interest, term of years yet to come and unexpired,
property, possession, claim and demand whatsoever, as well in law
as in equity, of the said mortgagor or obligor, of, in and to the
said demised premises, and every part and parcel thereof, with
the appurtenances; and also the said indenture of lease, and the
renewal therein provided for, and every clause, article and
condition therein expressed and contained.
Sec. 273. What form of mortgage on lease of real property.
The use of the following form of instrument for mortgages on
leases of real property is lawful, but this section does not
prevent or invalidate the use of other forms.
SCHEDULE D.
MORTGAGE ON LEASE OF REAL PROPERTY.
This indenture, made the ....... day of ......., in the year one
thousand ....... hundred and ......., between ....... of (insert
residence) of the first part and ....... of (insert residence) of
the second part; whereas ....... did, by a certain indenture of
lease, bearing date the ....... day of ......., in the year one
thousand nine hundred and ......., demise, lease and to farm let
unto ....... and to ....... executors, administrators and
assigns, all and singular the premises hereinafter mentioned and
described, together with their appurtenances; to have and to hold
the same unto the said ....... and to ....... executors,
administrators and assigns, for and during and until the full end
and term of ....... years, from the ....... day of ......., one
thousand nine hundred and ......., fully to be complete and
ended, yielding and paying therefor unto the said ....... and to
....... or assigns, the yearly rent or sum of ............... .
And whereas, the said part ....... of the first part justly
indebted to the said part ....... of the second part, in the sum
of ....... lawful money of the United States of America, secured
to be paid by ....... certain bond or obligation, bearing even
date herewith, conditioned for the payment of the said sum of
....... on the ....... day of ......., nineteen hundred and
....... and the interest thereon to be computed from ....... at
the rate of ....... per centum per annum and to be paid ...... .
It being thereby expressly agreed that the whole of the said
principal sum shall become due at the option of the mortgagee or
obligee after default in the payment of interest, taxes or
assessments or rents as hereinafter provided.
Now this indenture witnesseth that the said part ....... of the
first part, for the better securing the payment of the said sum
of money mentioned in the condition of the said bond or
obligation, with interest thereon, and also for and in
consideration of the sum of one dollar, paid by the said part
....... of the second part, the receipt whereof is hereby
acknowledged, doth grant and release, assign, transfer and set
over unto said part ....... of the second part, and to his heirs
(or successors) and assigns forever.
(Description)
Together with the appurtenances and all the estate and rights of
the part ........ of the first part of, in and to said premises
under and by virtue of the aforesaid indenture of lease.
To have and hold the said indenture of lease and renewal, and the
above granted premises, unto the said part ....... of the second
part, his heirs and assigns, for and during all the rest, residue
and remainder of the said term of years yet to come and
unexpired, in said indenture of lease and in the renewals therein
provided for; subject, nevertheless, to the rents, covenants,
conditions and provisions in the said indenture of lease
mentioned.
Provided always that if the said part ....... of the first part
shall pay unto the said part ....... of the second part, the said
sum of money mentioned in the condition of the said bond or
obligation, and the interest thereon, at the time and in the
manner mentioned in the said condition, that then these presents
and the estate hereby granted, shall cease, determine and be
void.
And the said part ....... of the first part covenant ....... with
the said part ....... of the second part as follows:
First. That the part ....... of the first part will pay the
indebtedness as hereinbefore provided.
And if default shall be made in the payment of any part thereof
the said part .......of the second part shall have power to sell
the premises therein described according to law.
Second. That the said premises now are free and clear of all
incumbrances whatsoever, and that ....... ha ....... good right
and lawful authority to convey the same in manner and form hereby
conveyed.
Third. That the part .......of the first part will keep the
buildings on the said premises insured against loss by fire, for
the benefit of the mortgagee.
Fourth. That the part ....... of the first part will pay the
rents and other charges mentioned in and made payable by said
indenture of lease within ....... days after said rent or charges
are payable.
Fifth. And it is hereby expressly agreed that the whole of the
said principal sum shall become due at the option of the said
mortgagee or obligee after default in the payment of any
installment of principal, or after default in the payment of
interest for ....... days, or after default in the payment of any
rent or other charge made payable by said indenture of lease for
....... days, or after default in the payment of any tax or
assessment for ....... days after notice and demand.
In witness whereof, the said part ....... of the first part to
these presents ha ....... hereunto set ....... hand ....... and
seal ....... the day and year first above written. Sealed and
delivered
In the presence of
Sec. 274. Transfers and mortgages of interest in decedents'
estates.
Every conveyance, assignment, or other transfer of, and every
mortgage or other charge upon the interest, or any part thereof,
of any person in the estate of a decedent which is situated
within this state, shall be in writing, and shall be acknowledged
or proved in the manner required to entitle conveyances of real
property to be recorded. Any such instrument may also be recorded
as hereinafter provided; and if not so recorded, it is void
against any subsequent purchaser or mortgagee of the same
interest or any part thereof, in good faith and for a valuable
consideration, whose conveyance or mortgage is first duly
recorded. If such interest is entirely in the real property of a
decedent, the conveyance or mortgage shall be recorded in the
office of the recording officer where such real property is
situated. If such interest is in both the personal and the real
property of a decedent the conveyance or mortgage shall be
recorded in the office of the surrogate issuing letters
testamentary or letters of administration upon the said
decedent's estate, or if no such letters have been issued, then
in the office of the surrogate having jurisdiction to issue the
same, and also in the office of the said recording officer. Such
a conveyance or mortgage when so recorded, shall be indexed under
the name of the decedent, in a book to be kept for the purpose by
each recording officer. The person presenting any such instrument
for record shall pay to the clerk of the surrogate's court a fee
of ten cents for each folio. Such filing or recording shall not
be deemed notice of such conveyance, assignment or other transfer
of, or mortgage or other lien or charge upon the interest, or any
part thereof of any person in the estate of a decedent which is
situated within the state, so as to charge the legal
representative of the estate with liability for payment to a
legatee or other beneficiary of an estate unless and until he
shall have received actual notice of such conveyance, assignment
or other transfer.
Sec. 274-a. Certificate of principal amount unpaid on
mortgages of real property.
1. The holder of a mortgage upon real property shall execute
and deliver to the owner of the real property upon which
such mortgage is a lien a written instrument setting forth
the amount of the principal of said mortgage remaining
unpaid, the date to which interest has been paid, and the
amounts, if any, claimed to be unpaid upon said mortgage for
principal and interest, itemizing the same, provided,
however, that prior written demand by registered or
certified mail has been made upon the holder of such
mortgage by such owner of the real property and that such
owner of the real property shall have executed and delivered
to another a written contract to convey, or shall have
received a written commitment to make a mortgage loan upon,
the real property or an interest therein. The written
instrument hereinbefore required of the holder of the
mortgage shall be a certificate duly executed and
acknowledged in the same manner as required by law to
entitle a conveyance of real property to be recorded, except
that a bank, savings bank, private banker, trust company,
savings and loan association or any other banking
organization, as defined in the banking law, a national bank
or trust company or any other federally-chartered or
federally-regulated savings and loan association or other
banking institution and an insurance company duly organized
or licensed to do business in this state under the insurance
law of this state and the state of New York, or an agency
thereof and a political subdivision of the state of New York
or an agency thereof may, in lieu of the said certificate,
furnish a letter signed by a duly authorized officer, or
employee or agent, containing the information required to be
set forth in such certificate. An owner of real property who
shall have complied with the foregoing requirements and who
shall not have received the written instrument from the
holder of the mortgage thereon within twenty days after such
compliance shall be entitled to petition a court of
competent jurisdiction for an order requiring such holder of
the mortgage to comply with this section.
2. (a) The mortgagee of an owner-occupied, one-to-six
family residential structure or residential condominium
unit, shall deliver within thirty days, any mortgage
related documents to an authorized individual making a
bona fide written demand for such documents. The
mortgagee shall not charge for providing the mortgage-
related documents, provided, however, the mortgagee may
charge not more than twenty dollars, or such amount as
may be fixed by the banking board, for each subsequent
payoff statement provided under this subdivision. If
the mortgagee fails to deliver the mortgage-related
documents, the mortgagee shall be liable for the actual
damages to the mortgagor by reason of such failure. In
computing actual damages the court may consider the
actual rate of interest on the mortgage debt and
current prevailing rate or rates of interest on
comparable debts. However, actual damages do not
include pain and suffering, mental or emotional
distress or the like. The replacement costs of a lost
abstract of title required to be delivered hereunder,
may be deducted from the amount required to satisfy the
mortgage.
(b) When used in this section:
(i) "Authorized individual" means the mortgagor, the
mortgagor's attorney, or the attorney
representing a banking organization which has
agreed to make a loan secured by the same real
property securing the mortgage for which the
mortgage related documents have been requested.
(ii) "Mortgagee" means (1) the current holder of the
mortgage of record or the current holder of the
mortgage, (2) any person to whom payments are
required to be made and (3) their personal
representatives, successors and assigns.
(iii) "Bona fide written demand" means a written
demand made by an authorized individual in
connection with a sale or refinancing of the
mortgaged property or some other event where the
mortgage is reasonably expected to be paid off
or assigned. Such demand shall either be
delivered personally, or by registered or
certified mail, postage prepaid, return receipt
requested. The demand shall include the names of
the mortgagor and mortgagee, the address of the
mortgaged property, loan number, the date of the
mortgage or the date it was recorded, the
mortgage related documents demanded and the
proposed payoff date or date of assignment of
the mortgage, if applicable. If the demand
includes a request for the abstract of title,
the demand shall include the agreement by the
mortgagor to pay for a replacement abstract of
title, the cost of which may not exceed the
actual replacement cost of such abstract of
title, in the event that the mortgage is not
paid off or the abstract of title is not
returned within thirty days of the proposed
payoff date. Such demand shall include the
following in capital letters:
"THIS DEMAND IS MADE UNDER SECTION 274-a OF THE
REAL PROPERTY LAW. FAILURE TO COMPLY WITH THIS
DEMAND MAY RESULT IN SEVERE PENALTIES."
(iv) "Mortgage-related documents" means:
(1) the abstract of title for the real property
securing the mortgage if such document is
in the possession and control of the
mortgagee. In the event that the mortgage
is not paid off, the authorized individual
receiving the abstract of title shall
within thirty days of the proposed payoff
date return the abstract of title to the
mortgagee or other person so designated by
the mortgagee; upon a failure to so return
the abstract of title, the mortgagee may
obtain a replacement abstract of title, the
cost of which may not exceed the actual
replacement cost of such abstract of title
and which shall be paid by the mortgagor;
(2) a payoff statement setting forth the
balance of the mortgage, including
principal, interest and other charges
assessed pursuant to the loan documents,
together with a per diem rate for interest
accruing after the date to which the
balance has been calculated. The payoff
statement may, in the event that the
statement reflects payments which may have
not yet cleared, require the authorized
individual to obtain from the mortgagee a
day of payoff verification of the payoff
statement. A payoff statement requiring day
of payoff verification shall include, in
addition to the address of the mortgagee,
the telephone number of the mortgagee and,
if a banking organization or corporation,
the name or department, and its telephone
number and facsimile phone number. Unless
the payoff statement requires a day of
payoff verification, a mortgagee furnishing
a payoff statement shall be obligated to
make its best effort to furnish a
satisfaction of mortgage upon receipt of
the amount set forth in such statement
unless such person subsequently notifies
the authorized individual of an error in
the payoff statement. The payoff statement
furnished by a mortgagee shall include a
name or department in addition to the
address of the banking organization or
corporation for use in connection with
preparation of an affidavit under
subdivision five of section nineteen
hundred twenty-one of the real property
actions and proceedings law;
(3) if requested and if the title insurance
policy is in the possession and control of
the mortgagee, a copy of such policy or a
statement setting forth the name of the
insurer and the number of such policy.
(v) "Banking organization" shall have the same
meaning as provided in subdivision eleven of
section two of the banking law and shall include
any institution chartered or licensed by the
United States or any state.
Sec. 275. Certificate of discharge of mortgage required.
1. Whenever a mortgage upon real property is due and payable,
and the full amount of principal and interest due on the
mortgage is paid, a certificate of discharge of mortgage
shall be given to the mortgagor or person designated by him,
signed by the person or persons specified in section three
hundred twenty-one of this chapter. The person signing the
certificate shall, within thirty days thereafter, arrange to
have the certificate presented for recording to the
recording officer of the county where the mortgage is
recorded. The provisions of this section shall not apply to
any mortgage granted to or made by the state of New York, or
any agency or instrumentality thereof or any political
subdivision of the state or any agency or instrumentality
thereof.
2. For purposes of this section, the full amount of principal
and interest due on a mortgage shall not be considered to be
paid whenever such mortgage continues to secure a bona fide
debt and an enforceable lien continues to exist, such as may
occur in the following situations:
(a) the commercial practice of lenders trading or selling
mortgages on the secondary market;
(b) the replacement of a construction loan with permanent
financing;
(c) the refinancing of an existing loan with a new lender,
such as where the original lender assigns a note and
the mortgage securing its payment to another lender in
return for consideration and such mortgage is
consolidated with another mortgage which secures any
funds advanced by the new lender to the mortgagor;
(d) the modification of the terms of a loan by a mortgagor
and mortgagee in order to avoid foreclosure; and
(e) a refinancing that occurs in conjunction with the sale
of property such that the seller conveys property to
the purchaser subject to the lien of the mortgage and
the original lender assigns its note and mortgage on
the property to the purchaser's lender.
3. Except with respect to the assignment of a mortgage in
connection with a transaction described in paragraph (a) of
subdivision two of this Section, in order to record an
assignment of a mortgage there must be set forth in the
assignment document or attached thereto and recorded as part
thereof a statement under oath signed by the mortgagor or
any other party to the transaction having knowledge of the
facts (provided such other party asserts such knowledge),
that the assignee is not acting as a nominee of the
mortgagor and that the mortgage continues to secure a bona
fide obligation. With respect to the assignment of a
mortgage in connection with a transaction described in
paragraph (a) of subdivision two of this Section, such
assignment shall contain the following statement: "This
assignment is not subject to the requirements of section two
hundred seventy-five of the Real Property Law because it is
an assignment within the secondary mortgage market."
Sec. 276. Effect of certain easements on the right to invest
in mortgages.
The existence of an easement in real property acquired or
reserved by a municipal corporation, a railroad corporation or
other transportation corporation, shall not be deemed an
encumbrance upon such real property under any law relating to
investments in mortgages upon real property by corporations,
trustees, executors, administrators, guardians or other persons
holding trust funds, but the effect of such an easement upon the
real property which it affects, shall be taken into consideration
in determining the value thereof.
Sec. 277. Modification and extension of mortgage investment.
1. Corporations, trustees, executors, administrators,
guardians, committees, conservators and other persons
holding trust funds, savings banks and other corporations
that shall have made or shall own or hold an investment,
with the specified ratio of real property security, in a
bond and mortgage or share or part thereof or series or
group of bonds and mortgages or in any instrument evidencing
any collateral or other interest in such a bond and mortgage
or share or part thereof or such series or group of bonds
and mortgages, or in any participation or other certificate
secured by the deposit of, or evidencing any share, part or
interest in the principal sum of any such bond and mortgage
or share or part thereof or series or group of bonds and
mortgages, whether any of such investments, instruments or
certificates be guaranteed or not, may, prior to April
first, nineteen hundred sixty-nine waive or modify, or agree
to waive or modify, either with or without consideration and
prior or subsequent to maturity, any terms and conditions
thereof, including the rate of interest, due or to become
due and extend or re-extend or agree to extend or re-extend
such bond and mortgage or share or part thereof, or such
series or group or such evidencing instrument or
participation or other certificate for a period of not more
than five years from the time of such extension, by
agreement with the owner of the real property subject to the
lien of such bond and mortgage or bonds and mortgages or by
agreement with the issuer or guarantor of any such
evidencing instrument or participation or other certificate,
notwithstanding that, at the time of such waiver,
modification, extension or agreement, the value of such real
property may be less than that required by law for an
original investment of such an amount therein by such holder
and, in case any such investment is guaranteed, any such
holder thereof may also extend or re-extend or agree to
extend or re-extend the time of payment under the guaranty
for a like period from its due date, and may release or
agree to release such guaranty or from time to time waive or
modify or agree to waive or modify any terms or conditions
thereof, including the rate of interest due or to become
due.
2. In addition to the provisions of subdivision one hereof, any
corporation, trustee, executor, administrator, guardian,
committee, conservator or other person, including any
official of the state or any political subdivision thereof,
holding trust funds, or any savings bank or other
corporation that shall have made or shall own or hold such
investment, may prior to April first, nineteen hundred sixty-
nine join in promulgating, participate in, consent to or pay
any assessment under or incur any necessary expense in
connection with participation in any plan providing for the
readjustment, modification or reorganization of such
investment, which plan is required by the terms thereof or
the provisions of law applicable thereto to be approved by a
court of this or any other state or of the United States,
having competent jurisdiction over proceedings for such
readjustment, modification or reorganization, and if such
plan shall have been or shall hereafter be duly approved by
any such court, may execute such instruments and do such
acts as may be required thereby, and as may be necessary or
desirable for the consummation thereof, and may accept and
hold, as legal investments, any securities or obligations,
secured or unsecured, issued pursuant to such plan so
approved, notwithstanding, without limiting the generality
of the foregoing, that such plan may provide for the
extension of the maturity or reduction of the principal, or
of the rate of interest, or for any other modification of
such investment or of any bond and mortgage or bonds and
mortgages held as security for or for the benefit of the
holders of such investment.
3. This section shall be construed so as to effectuate its
purpose as a grant of powers. The limitations and
restrictions contained herein shall not apply to powers
granted by any other law but only to the powers granted
herein.
Sec. 277-a. Powers of fiduciaries and others holding
guaranteed mortgages or mortgage investments.
Trustees, executors, administrators, guardians, committees for
incompetents, conservators of conservatees and all other persons
acting in any fiduciary capacity, including all officials of the
state or any political subdivision thereof, and corporations
organized under, or subject to the provisions of the banking law
or the insurance law, who hold any mortgage investment or any
wholly owned mortgage guaranteed by a guaranty corporation, or
who hold any claim against a guaranty corporation, may assent to
a plan of reorganization or readjustment of the guaranty
corporation or of the business thereof, or to any proposal,
however designated, to buy any assets of such guaranty
corporation, which has been or shall be approved by the supreme
court; and in connection therewith may assign such claims,
execute such instruments and do such acts as may be required by
such plan or proposal, or as may be necessary or desirable for
the consummation thereof; and may accept in exchange for such
claims, and hold same as legal investments, any stock, securities
or obligations, secured or unsecured, issued pursuant to such
plan or proposal; and may join in any voting trust agreement
provided for by such plan or proposal. The terms "mortgage
investment" and "guaranty corporation" as used herein shall be
construed as said terms are defined by section two of chapter
seven hundred forty-five of the laws of nineteen hundred thirty-
three, as amended, and by section three of chapter nineteen of
the laws of nineteen hundred thirty-five, as amended.
Sec. 278. Exchange of mortgage investment.
Trustees, executors, administrators, guardians, committees,
conservators, receivers, the town treasurer of any town and other
persons and corporations holding trust funds, corporations and
private bankers organized under or subject to the provisions of
the banking law, the superintendent of banks as conservator,
liquidator or rehabilitator of any such corporation or private
banker organized under and subject to the provisions of the
banking law, persons, partnerships, and corporations organized
under or subject to the provisions of the insurance law, the
superintendent of insurance as conservator, liquidator or
rehabilitator of any such person, partnership or corporation
organized under or subject to the provisions of the insurance
law, and other domestic corporations, that shall have made or
shall hold an investment, whether with or without a specified
ratio of real property security, in a bond secured by mortgage on
real property or share or part thereof, whether guaranteed or
not, may, at any time without an order of the court or other
authority, exchange, prior or subsequent to maturity, such bond
and mortgage or share or part thereof and any rights in respect
thereto, for bonds of Home Owners' Loan Corporation, a
corporation created under home owners' loan act of nineteen
hundred and thirty-three, and may hold such bonds of Home Owners'
Loan Corporation as authorized and lawful investments for any and
all purposes, notwithstanding the provisions of any general or
special law of this state inconsistent with the provisions of
this section.
Sec. 278-a. Sale or exchange of certain real property or
mortgage investments therein authorized.
Trustees, executors, administrators, guardians, committees,
conservators and all other persons or corporations holding trust
funds or acting in a fiduciary capacity, corporations and private
bankers organized under or subject to the provisions of the
banking law, the superintendent of banks as conservator,
liquidator or rehabilitator of any such corporation or private
banker organized under and subject to the provisions of the
banking law, persons, partnerships and corporations organized
under or subject to the provisions of the insurance law, the
superintendent of insurance as conservator, liquidator or
rehabilitator of any such person, partnership or corporation
organized under or subject to the provisions of the insurance law
who or which
(1) own any property on which there is a building defined in the
multiple dwelling law as an old law tenement or who or which
hold a mortgage or other lien on such property, or
(2) own any property, improved or unimproved, or any mortgage or
other lien thereon, within any section of a municipality
included in a map showing sections containing areas for
clearance, replanning and low rent housing, adopted by the
planning commission of the municipality as a whole or part
of the master plan, or
(3) own any property, improved or unimproved, or any mortgage or
other lien thereon, within any section of a municipality
which may be designated by the planning commission or the
housing authority of the municipality as substandard or
insanitary, may sell such property, mortgage or lien, and
may, notwithstanding any other provision of law, receive and
hold in exchange therefor securities issued by a corporation
owning or acquiring title to such property, if such
corporation shall agree in writing at the time of such sale,
to reconstruct, improve, alter, repair or demolish such
property or to construct a new building on such property, or
on such property and on any contiguous property owned or to
be acquired by such corporation.
Sec. 279. Graduated payment mortgage.
1. A "graduated payment mortgage" means a mortgage which
provides: (i) monthly payments of principal and interest
which are lower during the initial years of the mortgage;
and (ii) that the graduation rate for the monthly payments,
the term of graduation and the interest rate are fixed
throughout the term of the loan; and (iii) monthly payments
of principal and interest shall be sufficient to pay all
interest and to effect full repayment of principal within
the term of the mortgage as fixed at its origination.
2. Every graduated payment mortgage shall be subject to the
following:
(a) the average annual rate of increase for principal and
interest payments shall not exceed:
(i) 7.5 percent per annum for a mortgage with a
graduation period of five years or less;
(ii) 6.5 percent per annum for a mortgage with a
graduation period of six years;
(iii) 5.5 percent per annum for a mortgage with a
graduation period of seven years;
(iv) 4.5 percent per annum for a mortgage with a
graduation period of eight years;
(v) 3.5 percent per annum for a mortgage with a
graduation period of nine years; and
(vi) 3 percent per annum for a mortgage with a
graduation period of ten years.
(b) periodic payments of principal and interest shall not
change more than once per annum and increases shall be
limited to the first ten years of the term of the
mortgage.
(c) payments of principal and interest are required in
amounts sufficient to pay all interest and full
repayment of principal within a period not to exceed
forty years.
3. Graduated payment mortgages may be offered only if the
lender:
(a) offers the prospective borrower a non-graduated payment
mortgage loan at the prevailing rate being offered by
that lender;
(b) provides the mortgagor with the option to convert the
graduated payment mortgage loan to a non-graduated
payment mortgage loan at a pre-determined time agreed
upon between the borrower and lender and at the same
rate of interest provided for the graduated payment
mortgage loan; and
(c) discloses in advance on a uniform disclosure statement,
prescribed by the banking board, the relevant
provisions of the graduated payment mortgage loan
including:
(i) a side by side comparison of interest rates and
other terms that differ between a non-graduated
payment mortgage loan and a graduated payment
mortgage loan;
(ii) payment schedules for both types of loans and
the total payment in dollars over the full term
of each loan;
(iii) a statement prominently displayed that borrowers
have the option to elect a non-graduated payment
mortgage loan; and
(iv) a description of the conversion option.
4. Failure of any lender to comply with any of the foregoing
provisions shall not render the mortgage void or
unenforceable unless otherwise provided by law.
5. The provisions of this section shall be applicable only to a
mortgage on real property improved by a one to six family
residence given by a natural person to secure a loan or to
any agreement or note made by a natural person in pursuance
of any loan for the purpose of financing the purchase of or
refinancing an existing ownership interest in certificates
of stock or other evidence of an ownership interest in, and
a proprietary lease from, a corporation or partnership
formed for the purpose of the cooperative ownership of real
estate, unsecured except to the extent of an assignment or
transfer of the stock certificates or other evidence of
ownership interest of the borrower and the proprietary lease
within ninety days from the making of the loan which would
otherwise conform to the provisions of this section but is
not otherwise entitled to be recorded as a mortgage.
Sec. 280. Reverse mortgage loans for persons sixty years of
age or older.
1. For purposes of this section the following terms shall have
the following meanings:
(a) Reverse mortgage loans. A loan which is secured by a
first mortgage on real property improved by a one- to
four-family residence or condominium that is the
residence of the mortgagor(s) the proceeds of which are
advanced to the mortgagor(s) during the term of the
loan in equal installments, in advances through a line
of credit or otherwise, in lump sums, or through a
combination thereof.
(b) Term reverse mortgage loan. Any reverse mortgage loan
that has a fixed term to maturity.
(c) Tenure reverse mortgage loan. Any reverse mortgage loan
that does not have a fixed term to maturity, but rather
matures solely upon contingent events, such as events
including but not limited to death or the real property
securing the loan no longer being the mortgagors'
principal residence.
(d) Authorized lender. Any bank, trust company, national
banking association, savings bank, savings and loan
association, federal savings bank, federal savings and
loan association, credit union, or federal credit union
or any licensed mortgage banker approved for the making
of reverse mortgage loans by the superintendent of
banks or any entity exempted from licensing pursuant to
section five hundred ninety of the banking law and
approved for the making of reverse mortgage loans by
the superintendent of banks.
(e) Mortgagor. A tenant in severalty who is sixty years of
age or older, or if the real property is held by
tenants by the entirety or by joint tenancy, the
youngest of which is sixty years of age or older.
(f) Banking board. The board established pursuant to
section thirteen of the banking law.
(g) Superintendent of banks. The position established
pursuant to Section twelve of the banking law as the
head of the banking department and pursuant to section
thirteen of the banking law as the chairman and
executive head of the banking board.
2. A reverse mortgage loan pursuant to this section shall be
subject to the following:
(a) the loan to value ratio shall be determined by the
banking board; and
(b) subject to such rules or regulations as the banking
board shall adopt, any authorized lender or any
successor or assign of such authorized lender which
suspends, ceases or makes late payments to a mortgagor
under a reverse mortgage loan shall be subject to
forfeiture (as liquidated damages to such mortgagor and
not as a penalty) of twice the interest which would
otherwise have been earned during the period in which
payments were suspended, ceased or made late, provided
that said authorized lender or any successor or assign
of such authorized lender shall have the right to make
payments pursuant to said loan agreement within fifteen
days of each payment date, without penalty; and
(c) the outstanding balance may be prepaid in full by the
mortgagor without penalty at any time during the term
and/or tenure of the loan; and
(d) an authorized lender is prohibited from using or
attaching any property or asset of the mortgagor except
the real property securing the reverse mortgage loan in
settlement of a reverse mortgage obligation; and
(e) the authorized lender must deliver to an applicant such
disclosures as may be required by the banking board
which shall describe the relevant portions of the
reverse mortgage being offered, and shall include but
not be limited to the following items:
(i) except for a tenure reverse mortgage loan, a
schedule of payments to and from the mortgagor
and the total payments in dollars over the term
of the reverse mortgage loan for both the
mortgagor and mortgagee depending on the type of
reverse mortgage loan being offered;
(ii) a statement prominently displayed advising
applicants to consult with appropriate
authorities regarding tax and estate planning
consequences of a reverse mortgage;
(iii) where applicable a description of prepayment and
refinancing features;
(iv) the interest rate and, except for a tenure
reverse mortgage loan, the total interest
payable on the loan;
(v) a statement concerning the compliance of the
lender with the criteria established by the
banking board that an authorized lender must
meet before it may make reverse mortgage loans
pursuant to this section; and
(vi) a statement setting forth those events which
would terminate the reverse mortgage loan; and
(f) in the event that an authorized lender or holder of the
reverse mortgage loan intends to initiate foreclosure
proceedings the mortgagor shall have the right to
designate a third party who shall be notified. In the
event that the mortgagor has not designated a third
party to receive such notice of foreclosure, then the
authorized lender or the holder of said reverse
mortgage loan shall notify the local or county office
for the aging of its intent to commence foreclosure
proceedings. Such entity shall take appropriate action
to protect the interests of the mortgagor; and
(g) an authorized lender must deliver to the applicant,
upon application, if available, a statement prepared by
the local or county office for the aging on the
advisability and availability of independent counseling
and information services. Further, no reverse mortgage
commitment shall be issued by an authorized lender
until the applicant presents, in writing, a statement
that the terms of the reverse mortgage loan have been
explained by an attorney, a housing and urban
development certified counselor or any other counseling
service as indicated on the statement supplied by the
county or local office for the aging or a signed
affidavit indicating that the applicant, although made
aware of the importance of counseling and its local
availability through the provision of such information
by the authorized lender, chooses not to utilize any of
the aforementioned available services. The form of such
statement and affidavit shall be developed by the New
York state office for the aging; and
(h) any such reverse mortgage shall expressly and
conspicuously bear a legend identifying it as such; and
(i) subject to such rules or regulations as the banking
board may adopt, a reverse mortgage loan shall be made
at either a fixed or variable rate of interest.
3. A reverse mortgage loan pursuant to this section may:
(a) provide that the mortgagor's closing costs, including
but not limited to loan or commitment fees, if any,
insurance premiums, house repairs, legal fees, the cost
of annuities, the costs of third-party counseling, the
costs of existing mortgages or liens, and other
appropriate costs be included in the principal of the
reverse mortgage loan and disbursed out of the loan
proceeds at closing;
(b) provide for the maintenance of an escrow account by the
authorized lender for purposes of payment of real
property taxes, insurance on the property securing the
loan, or any other fees and expenses as may be
permitted by banking board regulation;
(c) provide that an authorized lender may, consistent with
federal laws and regulations, include a due-on-sale
clause in its reverse mortgage loan agreement and at
its option exercise and enforce such clause in
accordance with its terms.
4. The banking board shall adopt those rules or regulations as
it considers appropriate to govern reverse mortgage loans
made pursuant to this section. No reverse mortgage loan
shall be made unless it conforms to the requirements of this
section and such rules and regulations as the banking board
may adopt except those reverse mortgage loans made pursuant
to section two hundred eighty-a of this article. A reverse
mortgage loan made by any authorized lender, national
banking association, federal savings and loan association or
federal credit union in conformity with applicable federal
laws and regulations specifically regulating reverse
mortgage loans shall be deemed to conform to the
requirements of this section unless such reverse mortgage
loan fails to conform to such rules and regulations as the
banking board has expressly declared to be neither preempted
by, nor otherwise inconsistent with such federal laws or
regulations. Those rules or regulations shall include, but
are not limited to, the form and contents of any disclosure
statement, with the exception of the counseling statement
prepared by the New York state office for the aging pursuant
to paragraph (g) of subdivision two of this section, that
authorized lenders must provide to mortgagors.
5. Notwithstanding any inconsistent provision of law, the
priority of the lien of a reverse mortgage shall date from
the recording of the reverse mortgage irrespective of the
date of any advance of reverse mortgage loan proceeds.
6. Nothing in this section shall be construed to limit, impair
or otherwise affect the priority under applicable law of any
other mortgage, deed of trust, encumbrance or lien which was
recorded or filed prior to the effective date of this
section.
7. The sale or transfer of the real property securing the
reverse mortgage loan to a person other than an original
mortgagor or mortgagors shall result in the termination of
the loan.
8. In a term reverse mortgage loan, the real property securing
the reverse mortgage loan may be reappraised by an
independent appraiser at the end of the loan term. If the
value of the real property has appreciated, the term of the
reverse mortgage may be extended or refinanced, however, the
total reverse mortgage loan amount may not exceed such
amount or ratio as may be determined by the banking board.
The refinancing of the reverse mortgage loan shall be
provided by the original authorized lender or by any other
authorized lender designated by the mortgagee.
9. The principal, including any accrued but unpaid interest, of
a reverse mortgage loan agreement entered into pursuant to
this section may be insured by the mortgagor. If such
insurance is purchased from or otherwise provided by any
agency of the state of New York the mortgagor shall be
granted the right, for a term reverse mortgage loan, to
refinance or extend the reverse mortgage loan at the end of
the term, subject to such rules or regulations as the
banking board may adopt. The authorized lender shall have
the option to choose between refinancing or extending the
reverse mortgage loan. Subject to obtaining an adequate
increase in the insurance and subject to such rules and
regulations as the banking board may adopt, the total
reverse mortgage loan amount shall not exceed such amount or
loan to value ratio as may be determined by the banking
board. The refinancing of the reverse mortgage loan shall be
provided by the original authorized lender or by any other
authorized lender designated by the mortgagee.
10. Any authorized lender offering reverse mortgage loans
pursuant to this section shall also offer reverse mortgage
loans pursuant to section two hundred eighty-a of this
article. Subject to this section in the event that an
authorized lender makes reverse mortgage loans under this
Section then that lender must make an equal number of
reverse mortgage loans pursuant to section two hundred
eighty-a of this article. Such loans shall be made to
individuals who meet the requirements promulgated in section
two hundred eighty-a of this article provided that such
individual seeking the loan would otherwise qualify and be
approved for that loan. In the event that no or insufficient
applications for reverse mortgage loans pursuant to section
two hundred eighty-a of this article are made to a lender
who has previously made reverse mortgage loans pursuant to
this section then there shall be no requirement for that
lender to make a reverse mortgage loan pursuant to section
two hundred eighty-a of this article. It shall also not be a
requirement that an authorized lender make any reverse
mortgage loan to any individual who would not qualify for
such loan and/or would not otherwise be approved for such
loan.
11. Nothing contained in this section, section six-h of the
banking law or any other provision of law shall be construed
to prohibit a banking organization or licensed mortgage
banker from providing reverse mortgages to homeowners in
this state under the federal housing administration's home
equity conversion mortgage insurance demonstration program.
Sec. 280-a. Reverse mortgage loans for persons seventy years
of age or older.
1. For purposes of this section, the following terms shall have
the following meanings:
(a) Reverse mortgage loan. A loan which is secured by a
first mortgage on real property improved by a one to
four-family residence or condominium that is the
residence of the mortgagor(s) the proceeds of which are
advanced to the mortgagor(s) during the term of the
loan in equal installments, or in advances through a
line of credit or otherwise, in lump sums, or through a
combination thereof.
(b) Term reverse mortgage loan. As used in this section,
any reverse mortgage loan that has a fixed term for
payments to the mortgagor(s).
(c) Tenure reverse mortgage loan. As used in this section,
any reverse mortgage loan that does not have a fixed
term for payments to the mortgagor(s).
(d) Authorized lender. Any bank, trust company, national
banking association, savings bank, savings and loan
association, federal savings bank, federal savings and
loan association, credit union, or federal credit union
or any licensed mortgage banker approved for the making
of reverse mortgage loans by the superintendent of
banks or any entity exempted from licensing pursuant to
section five hundred ninety of the banking law and
approved for the making of reverse mortgage loans by
the superintendent of banks.
(e) Mortgagor. A tenant in severalty who is seventy years
of age or older, or if the real property is held by
tenants by the entirety or by joint tenancy, the
youngest of which is seventy years of age or older and
whose income does not exceed eighty percent of the
median income of the county in which he or she resides.
(f) Banking board. The board established pursuant to
section thirteen of the banking law.
(g) Superintendent of banks. The position established
pursuant to Section twelve of the banking law as the
head of the banking department and pursuant to section
thirteen of the banking law as the chairman and
executive head of the banking board.
2. A reverse mortgage loan pursuant to this section shall be
subject to the following:
(a) the mortgagor shall be granted lifetime possession of
the subject premises of the real property which is the
security for the reverse mortgage loan, as long as such
real property remains the mortgagors' principal
residence and subject to a limited waiver of the right
of foreclosure as determined by the banking board; and
(b) the term of the reverse mortgage, except for a tenure
reverse mortgage loan, shall be for a period of ten
years or less; and
(c) the loan to value ratio shall be determined by the
banking board; and
(d) subject to such rules or regulations as the banking
board shall adopt, for that period of time commencing
at the end of the loan term or ten years after the
reverse mortgage loan commences, whichever occurs
first, and ending at such time as the reverse mortgage
loan is paid in full, the authorized lender, at its
option, may receive no more than twenty percent of the
future appreciation of the property securing the
reverse mortgage loan as full or partial consideration
for the making of a reverse mortgage loan; provided,
however, that such future appreciation shall be limited
by such rules and regulations as the banking board may
adopt or the authorized lender may charge a fixed rate
of interest on the outstanding balance of monies
advanced under the reverse mortgage agreement or any
combination thereof. Said reverse mortgage loan shall
not come due and shall be extended until the voluntary
relinquishment by the mortgagors of possessory interest
in such real property, the real property no longer
being the mortgagors' principal residence, the death of
the mortgagors, or such other events as may be
determined by the banking board. Any such appreciation
shall not be considered interest for the purposes of
any law regulating the maximum rate of interest which
may be charged, taken or received including sections
190.40 and 190.42 of the penal law; and
(e) the authorized lender shall maintain an escrow account
for the purposes of paying real property taxes,
insurance premiums of the property securing the reverse
mortgage loan, or for the payment of any other fees and
expenses as may be permitted by banking board
regulation; and
(f) subject to such rules or regulations as the banking
board may adopt, an authorized lender or any successor
or assign of such authorized lender which may suspends,
ceases or makes late payments to a mortgagor under a
reverse mortgage loan shall be subject to forfeiture
(as liquidated damages to such mortgagor and not as a
penalty) of twice the interest which would otherwise
have been earned during the period in which payments
were suspended, ceased, or made late, provided that
said authorized lender or any successor or assign of
such authorized lender shall have the right to make
payments pursuant to said loan agreement within fifteen
days of each payment date without penalty; and
(g) an authorized lender must deliver to an applicant such
disclosures as may be required by the banking board
which shall describe the relevant portions of the
reverse mortgage being offered, and shall include but
not be limited to the following items:
(i) except for a tenure reverse mortgage loan, a
schedule of payments to and from the mortgagor
and the total payments in dollars over the term
of the reverse mortgage loan for both the
mortgagor and mortgagee, depending on the type
of reverse mortgage loan being offered;
(ii) a statement prominently displayed advising
applicants to consult with appropriate
authorities regarding tax and estate planning
consequences of a reverse mortgage;
(iii) where applicable a description of prepayment and
refinancing features;
(iv) to the extent determinable at or prior to the
inception of the reverse mortgage loan, the
interest rate and, except for a tenure reverse
mortgage loan, the total interest payable on the
reverse mortgage loan;
(v) a statement concerning the compliance of the
lender with the criteria established by the
banking board that an authorized lender must
meet before it may make reverse mortgage loans
pursuant to this section; and
(vi) a statement setting forth those events which
would terminate the reverse mortgage loan; and
(h) the outstanding balance may be prepaid in full by the
mortgagor without penalty at any time during the
reverse mortgage loan term; and
(i) an authorized lender is prohibited from using or
attaching any property or asset of the mortgagor except
the real property securing the reverse mortgage loan in
settlement of a reverse mortgage obligation; and
(j) an authorized lender must deliver to the applicant upon
application, if available, a statement prepared by the
local or county office for the aging on the
advisability and availability of independent counseling
and information services. Further, no reverse mortgage
commitment shall be issued by the authorized lender
until the applicant presents, in writing, a statement
that the terms of the reverse mortgage loan have been
explained to them by an attorney, a housing and urban
development certified counselor or any other counseling
service as indicated on the statement supplied by the
county or local office for the aging or a signed
affidavit indicating that the applicant, although made
aware of the importance of counseling and its local
availability through the provision of such information
by the authorized lender, chooses not to utilize any of
the aforementioned available services. The form of such
statement and affidavit shall be developed by the New
York state office for the aging; and
(k) a reverse mortgage pursuant to this section shall
expressly and conspicuously bear a legend identifying
it as such; and
(l) subject to such rules or regulations as the banking
board may adopt, a reverse mortgage loan shall be made
at either a fixed or variable rate of interest; and
(m) in the event that an authorized lender or holder of the
reverse mortgage loan intends to initiate foreclosure
proceedings the mortgagor shall have the right to
designate a third party who shall be notified. In the
event that the mortgagor has not designated a third
party to receive such notice of foreclosure, then the
authorized lender or the holder of said reverse
mortgage loan shall notify the local or county office
for the aging of its intent to commence foreclosure
proceedings. Such entity shall take appropriate action
to protect the interests of the mortgagor.
3. A reverse mortgage loan pursuant to this section may:
(a) provide that an authorized lender may, consistent with
federal laws and regulations, include a due-on-sale
clause in its reverse mortgage loan agreement and at
its option exercise and enforce such clause in
accordance with its terms;
(b) provide that the mortgagor's closing costs, including
but not limited to loan or commitment fees if any,
insurance premiums, house repairs, legal fees, the
costs of annuities, the costs of third party
counseling, the costs of existing mortgages or liens,
and other appropriate costs be included in the
principal of the reverse mortgage loan and disbursed
out of the loan proceeds at closing.
4. The banking board shall adopt those rules or regulations as
it considers appropriate to govern reverse mortgage loans
made pursuant to this section. No reverse mortgage loan
shall be made unless it conforms to the requirements of this
section and such rules and regulations as the banking board
may adopt except those reverse mortgage loans made pursuant
to section two hundred eighty of this article. A reverse
mortgage loan made by any authorized lender, national
banking association, federal savings and loan association or
federal credit union in conformity with applicable federal
laws and regulations specifically regulating reverse
mortgage loans shall be deemed to conform to the
requirements of this section unless such reverse mortgage
loan fails to conform to such rules and regulations as the
banking board has expressly declared to be neither preempted
by, nor otherwise inconsistent with such federal laws or
regulations. Those rules or regulations shall include, but
are not limited to:
(a) any limitations on the taking of a percentage of the
future appreciation of the real property securing the
reverse mortgage loan as consideration for making the
reverse mortgage loan;
(b) the execution by an authorized lender of a limited
waiver of the right of foreclosure;
(c) with the exception of the counseling statement prepared
by the New York state office for the aging pursuant to
paragraph (j) of subdivision two of this section, the
form and contents of any disclosure statement that
authorized lenders must provide to mortgagors.
5. Notwithstanding any inconsistent provision of law, the
priority of the lien of a reverse mortgage shall date from
the recording of the mortgage irrespective of the date of
any advance of reverse mortgage loan proceeds or the date by
which an authorized lender shall be entitled to shared
appreciation or accrued but unpaid interest.
6. Nothing in this section shall be construed to limit, impair
or otherwise affect the priority, under applicable law, of
any other mortgage, deed of trust, encumbrance or lien which
was recorded or filed prior to the effective date of this
section.
7. The sale or transfer of the real estate securing the reverse
mortgage loan to a person other than an original mortgagor
or mortgagors shall result in the termination of the reverse
mortgage loan.
8. In a term reverse mortgage loan, the real property securing
the reverse mortgage may be reappraised by an independent
appraiser at the end of the loan term. If the value of the
property has appreciated, the term of the reverse mortgage
may be extended or refinanced; however the total reverse
mortgage loan amount may not exceed such amount or loan to
value ratio as may be determined by the banking board. The
refinancing of the reverse mortgage loan shall be provided
by the original authorized lender or by any other authorized
lender designated by the mortgagee.
9. The principal, including any accrued but unpaid interest, of
a reverse mortgage loan agreement entered into pursuant to
this section must be insured by the mortgagor. If such
insurance is purchased from or otherwise provided by any
agency of the state of New York, the mortgagor shall be
granted the right, for a term reverse mortgage loan, to
refinance or extend the reverse mortgage loan at the end of
the term, subject to such rules and regulations as the
banking board may adopt. The authorized lender shall have
the option to choose between refinancing or extending the
reverse mortgage loan. Subject to obtaining an adequate
increase in the insurance and subject to such rules and
regulations as the banking board may adopt, the total
reverse mortgage loan amount shall not exceed such amount or
ratio as may be determined by the banking board. The
refinancing of the reverse mortgage loan shall be provided
by the original authorized lender or by any other authorized
lender designated by the mortgagee.
Sec. 281. Credit line mortgage.
1. (a) For the purposes of this section, a "credit line
mortgage" shall mean any mortgage or deed of trust,
other than a mortgage or deed of trust made pursuant to
a building loan contract as defined in subdivision
thirteen of section two of the lien law, which states
that it secures indebtedness under a note, credit
agreement or other financing agreement that reflects
the fact that the parties reasonably contemplate
entering into a series of advances, or advances,
payments and readvances, and that limits the aggregate
amount at any time outstanding to a maximum amount
specified in such mortgage or deed of trust. For
purposes of this section, "credit line mortgage" shall
include a reverse mortgage loan as defined in sections
two hundred eighty and two hundred eighty-a of this
article.
(b) Payments made by an authorized lender pursuant to any
credit line reverse mortgage made in accordance with
section two hundred eighty-a of this article during any
one year shall be limited to such amount or ratio as
may be determined by the banking board. In the event
that a borrower does not take payment under such credit
line during the course of any year then that borrower
shall have the ability to increase the yearly payments
by that amount available but not borrowed during
previous years.
2. Any credit line mortgage may, and when so expressed therein,
shall secure not only the original indebtedness but also the
indebtedness created by future advances thereunder made
within twenty years from the date of the recording of such
credit line mortgage, whether such advances are obligatory
or are to be made at the option of the lender or otherwise,
to the same extent and with the same priority of lien as if
such future advances had been made at the time such credit
line mortgage was recorded pursuant to section two hundred
ninety-one of this chapter, although there may have been no
advances made at the time of the execution and
acknowledgment of such credit line mortgage, and although
there may be no indebtedness outstanding at the time any
advance is made. The total amount of indebtedness that may
be so secured by a credit line mortgage may increase or
decrease from time to time, but the amount so secured at any
one time shall not exceed the maximum amount specified in
such credit line mortgage, plus interest thereon at the rate
provided therein, and plus any disbursements made to protect
the security of such credit line mortgage, with interest on
such disbursements at the rate provided therein.
3. Nothing in this section shall affect the priority of a lien
under article two of the lien law with respect to future
advances made under a credit line mortgage after the filing
of the notice of such lien under the lien law.
4. This section shall apply to advances made after the
effective date of this section under a credit line mortgage,
whether such credit line mortgage is recorded on or after,
or was recorded prior to, the effective date of this
section.
5. Nothing in this section shall be construed to limit, impair
or otherwise affect the priority under applicable law
without reference to this section of a mortgage, deed of
trust, encumbrance or lien which was recorded or filed prior
to the effective date of this section.
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