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§6501
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§6501 . Definitions. In this article:
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§6501(a)
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(a) "Mortgage guaranty insurance" means insurance against financial loss by reason of nonpayment of any sum required to be paid under the terms of any instrument of indebtedness secured by a lien on real estate.
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§6501(b)
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(b) "Mortgage insurer" means a person licensed to transact the business of mortgage guaranty insurance in this state.
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§6501(c)
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(c) "Authorized real estate security" means:
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§6501(c)(1)
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(1) an amortized instrument of indebtedness evidencing a loan secured by a 1st lien on real estate which at the time the loan is made is not less than 80% but not more than 103% of the fair market value of the real estate with any percentage in excess of 100% being used to finance the fees and closing costs on such indebtedness, except, however, for reverse mortgage loans made pursuant to §280 and §200 a the real property law; provided that:
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§6501(c)(1)(A)
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(A) the loan is 1 which a regulated mortgage investor is authorized to make;
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§6501(c)(1)(B)
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(B) the improvement is a residential building or buildings designed for occupancy by not more than 4 families or is a condominium unit;
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§6501(c)(1)(C)
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(C) the lien may be subordinate to:
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§6501(c)(1)(C)(i)
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(i) the lien of any public bond, assessment, or tax, when no installment, call or payment of or under such bond, assessment or tax is delinquent; and
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§6501(c)(1)(C)(ii)
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(ii) outstanding mineral, oil or timber rights, easements or other restrictions on use, or leases under which rents or profits are reserved;
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§6501(c)(2)
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(2) an amortized instrument of indebtedness evidencing a loan secured by a junior lien on real estate which, when combined with all existing mortgage loan amounts at the time the loan is made, is not more than 100% of the fair market value of the real estate; provided that:
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§6501(c)(2)(A)
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(A) in determining the foregoing 100% limitation, if the loan securing the junior lien is an equity line of credit loan, the full amount of the line of credit to be secured by the junior lien shall be considered the amount of the loan;
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§6501(c)(2)(B)
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(B) the loan is 1 which a regulated mortgage investor is authorized to make;
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§6501(c)(2)(C)
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(C) the improvement is a residential building or buildings designed for occupancy by not more than 4 families or is a condominium unit;
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§6501(c)(2)(D)
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(D) in addition to any senior liens securing any amortized instruments of indebtedness on real estate, qualifying under paragraph (this sub§)(1) ,the junior lien may be subordinate to:
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§6501(c)(2)(D)(i)
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(i) the lien of any public bond, assessment, or tax, when no installment, call or payment of or under such bond, assessment or tax is delinquent; and
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§6501(c)(2)(D)(ii)
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(ii) outstanding mineral, oil or timber rights, easements or other restrictions on use, or leases under which rents or profits are reserved;
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§6501(c)(3)
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(3) an amortized instrument of indebtedness evidencing a loan secured by an ownership interest in, and a proprietary lease from, a corporation or partnership formed for the purpose of the cooperative ownership of real estate in this state and which at the time the loan is made is not less than 80% nor more than 100% of the purchase price of the ownership interest and the proprietary lease, if the loan is 1 which a regulated mortgage investor is authorized to make. In this article unless the context clearly requires otherwise, any reference to a mortgagor shall include an owner of such an ownership interest as described in (this ¶) and any reference to a lien or mortgage shall include the security interest held by a lender in such an ownership interest;
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§6501(c)(4)
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(4) an amortized instrument of indebtedness, evidencing a loan which otherwise conforms to the requirements of paragraph (this sub§),(1) or (this sub§),(3) and which has been amortized to less than 80% of the fair market value of the real estate at the time said loan was made; provided the borrower is not obligated directly or indirectly to pay any premium for mortgage guaranty insurance authorized under this article, and the instrument would be ineligible for sale to the Federal National Mortgage Association, the Government National Mortgage Association, the Federal Home Loan Mortgage Corporation or any other secondary mortgage market instrumentality or facility as the banking board determines, without such mortgage guaranty insurance; or
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§6501(c)(5)
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(5) where a loan is being made as part of the state of New York mortgage agency's forward commitment program as defined in title 17 of article 8 of the public authorities law, the lesser percentage set forth in paragraphs (this sub§)(1) and (this sub§)(3) shall be 60% and the range of such percentages shall apply to the fair market value at the time the loan was made of the real estate or the ownership interest in a corporation or partnership formed for the purpose of cooperative ownership of real estate, as the case may be.
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§6501(d)
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(d) "Contingency reserve" means an additional premium reserve established to protect policyholders against the effect of adverse economic cycles.
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§6501(e)
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(e) "Policyholders surplus" means the aggregate of capital, surplus and contingency reserve if a stock insurance company or, if a mutual insurance company, the aggregate of surplus and contingency reserve.
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§6501(f)
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(f) "Regulated mortgage investor" means a bank, trust company, savings bank, savings and loan association or insurance company, which is supervised by a department of this state or an agency of the federal government and which invests in authorized real estate securities.
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§6501(g)
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(g) "Segregated trust" is a trust which:
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§6501(g)(1)
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(1) is established by a reinsurer for the benefit of a mortgage insurer;
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§6501(g)(2)
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(2) has a trustee domiciled in the mortgage insurer's state of domicile, domiciled in New York or approved by the superintendent;
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§6501(g)(3)
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(3) is funded by assets permitted by article 14 of this chapter for the loss reserve required by paragraph §6502(a)(3) of this article and for the unearned premium reserve required by §1305 of this chapter;
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§6501(g)(4)
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(4) is funded by either cash, the types of reserve investments specified in paragraphs §1404(a)(1) and §1404(a)(2) of this chapter or by tax and loss bonds purchased pursuant to §832(e) of the Internal Revenue Code, for the greater of the amount of the contingency reserve required by paragraph §6502(a)(2) of this article or paragraph §6502(b)(1) of this article;
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§6501(g)(5)
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(5) makes quarterly and annual reports to the superintendent;
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§6501(g)(6)
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(6) is subject to withdrawals only by, and under the control of, the ceding mortgage insurer;
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§6501(g)(7)
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(7) permits examination by the superintendent;
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§6501(g)(8)
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(8) designates the superintendent for service of process;
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§6501(g)(9)
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(9) is governed by an agreement which, together with all amendments, shall be approved by the commissioner or superintendent of insurance of the mortgage insurer's domicile, and shall be provided to the superintendent, who shall have the right to disapprove of the agreement. Such agreement shall be deemed approved by the superintendent unless disapproved within 30 days from the date provided to the superintendent; and
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§6501(g)(10)
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(10) is in compliance with any other regulations or requirements of the superintendent relating to trust agreements. Source Data downloaded: 2009-04-09 15: 33: 14; Processed: 2009-05-08 15: 36: 25
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