N.Y. Private Housing Finance Law § 44-b: Mortgage modifications, evidence of pre-existing indebtedness

§ 44-b. Mortgage modifications, evidence of pre-existing indebtedness.

1. Notwithstanding the provision of any law, general or special, the

agency shall have the power to:

(i) consent to and contract for the modification of any of the terms

of a mortgage, and note or bond secured thereby, made pursuant to this

article for the purpose of obtaining insurance of such mortgage loan by

the federal government in order to refinance all or any part of the

indebtedness evidenced by such mortgage and note or bonds, or

(ii) satisfy such mortgage loan in order to enable the company to

obtain insurance by the federal government of a mortgage loan made for

the purpose of refinancing all or any part of the indebtedness evidenced

by such mortgage and note or bond.

Notwithstanding the provisions hereof, the agency on or after June

fifteen, nineteen hundred seventy-six, shall not modify or satisfy a

mortgage loan, pursuant to this subdivision one, where the principal

amount of the mortgage loan insured by the federal government is less

than eighty-five per centum of the principal amount outstanding on the

original mortgage loan at the time such original mortgage loan is

refinanced, unless such modification or satisfaction is first approved

by the New York state public authorities control board created pursuant

to article one-A of the public authorities law.

2. In the event that the existing mortgage loan is satisfied pursuant

to this section, the agency may in consideration of the issuance of such

satisfaction accept a new mortgage and note or bond insured by the

federal government in an amount equal to the maximum principal amount of

a mortgage loan the federal government will insure or accept the

proceeds available to the housing company as a result of the

refinancing.

3. In the event that there is residual indebtedness, the housing

company shall make and the agency shall accept an instrument evidencing

such indebtedness in such form and upon such terms as the agency may

approve, provided that such terms are not inconsistent with subdivision

two of section twenty of this chapter.

4. Notwithstanding any other provisions of this article where the

commissioner has made the findings required in subdivision one of

section twenty-six and where a project has been approved pursuant to

subdivision five of section twenty-six of this chapter, the agency may

make or contract to make a mortgage loan pursuant to subdivision two or

three of this section without further findings by the commissioner or

further approval by the local legislative body.

5. No company shall accept a mortgage loan to be insured by the

federal government made for the purpose of refinancing the existing

mortgage loan of a company which shall exceed the amount which can be

supported by the income derived from the operation of the project at the

rental rate determined by the commissioner that would be necessary to

meet all necessary payments to be made by the company, of all expenses

including fixed charges, sinking funds, reserves and dividends on

outstanding stock as authorized by the commissioner, if the principal

amount of the original mortgage loan of the company were to be fully

repaid over the term of such mortgage loan by constant and equal

payments of principal and interest and if the interest rate on the

company's original mortgage loan was eight and one-half percent per

annum.