New York Amends Law Concerning Limitations on Mortgage Guaranty Insurance Companies

The State of New York has amended NY Ins L § 6503(c), effective immediately.

Mortgage insurers providing coverage on loans secured by a first lien on real estate may now elect to pay the entire indebtedness to the insured and acquire title to the authorized real estate security. Previously, a mortgage insurer was required to limit its coverage, net of applicable reinsurance, to a maximum of twenty-five percent of the entire indebtedness to the insured, or in lieu thereof, a mortgage insurer.

Additionally, a mortgage insurer providing coverage on loans secured by a junior lien on real estate may now “elect to insure a portfolio of loans secured by instruments constituting a junior lien on real estate.” Prior to this amendment, a mortgage insurer was required to:

“…limit its coverage net of applicable reinsurance to a maximum of twenty-five percent of the combined indebtedness of all existing mortgage loan amounts at the time the loan is made secured by all liens or charges on the real estate, or in lieu thereof, a mortgage insurer may elect to insure a portfolio of loans secured by instruments constituting a junior lien on real estate, provided that the total amount at risk in any one pool shall not at any time exceed twenty  percent of the original principal mortgage loans insured.”

Senate Bill 1478

 

CLA Bankers Advisory is an Authorized MERS Patron Member

Please contact our office to discuss a range of service options to help your organization complete its compliance obligation for MERS Quality Assurance. CLA Bankers Advisory is a MERS patron member and provides consulting services, including assessments necessary for completion of the MERS Annual Report process. Engagements evaluate completion of system-to-system reconciliation and validation of records between lenders, MERS, and any sub-servicer.

  • Regulatory Compliance Consultant
  • Lexington, MA
  • 781-402-6400

Ryan Peters, JD, is a regulatory compliance consultant with Bankers Advisory. He is a graduate of the University of Maine and earned his juris doctor at Suffolk University Law School.

Leave a Reply

Your email address will not be published. Required fields are marked *

Subscribe to Our Email List

* indicates required