N.Y. Public Authorities Law § 2401: Legislative findings

§ 2401. Legislative findings. * It is hereby found and declared that

there continues to exist throughout the state a seriously inadequate

supply of safe and sanitary dwelling accommodations, including

accommodations for persons and families of low income, and a seriously

inadequate supply of credit available for new residential improvement

loans at carrying charges within the financial means of persons and

families of low or moderate income. This condition is contrary to the

public interest and threatens the health, safety, welfare, comfort and

security of the people of the state. It is found and declared that one

major cause of this condition has been recurrent, cyclical shortages of

funds in private banking channels available for residential mortgages.

Such shortages have contributed to drastic reductions in construction

starts of new residential units. In addition, they have made the sale

and purchase of existing residential units a virtual impossibility in

many parts of the state. The ordinary operations of private enterprise

have not in the past corrected these conditions.

* NB Effective until July 23, 2027

* It is hereby found and declared that there continues to exist

throughout the state a seriously inadequate supply of safe and sanitary

dwelling accommodations, including accommodations for persons and

families of low income. This condition is contrary to the public

interest and threatens the health, safety, welfare, comfort and security

of the people of the state. It is found and declared that one major

cause of this condition has been recurrent, cyclical shortages of funds

in private banking channels available for residential mortgages. Such

shortages have contributed to drastic reductions in construction starts

of new residential units. In addition, they have made the sale and

purchase of existing residential units a virtual impossibility in many

parts of the state. The ordinary operations of private enterprise have

not in the past corrected these conditions.

* NB Effective July 23, 2027

It is further found and declared that the drastic reduction in

residential construction starts associated with such shortages have

caused a condition of substantial unemployment and underemployment in

the construction industry which results in hardships to many individuals

and families, wastes vital human resources, increases the public

assistance burdens of the state and municipalities, impairs the security

of family life, impedes the economic and physical development of

municipalities and adversely affects the welfare and prosperity of all

the people of the state. A stable supply of adequate funds for

residential mortgages is required to spur new housing starts in an

orderly and sustained manner and thereby to reduce the hazards of

unemployment and underemployment in the construction industry. The

unaided operations of private enterprise have not met and cannot meet

the need for a stable supply of adequate funds for residential mortgage

financing.

It is further found and declared that these conditions associated with

such recurrent shortages of residential mortgage funds contribute to the

persistence of slums and blight and to the deterioration of the quality

of the environment and living conditions of a large number of persons

residing in the state of New York, have adversely affected the economy

of the state as a whole and are contrary to the declared policy of the

state to promote a vigorous and growing economy, to prevent economic

stagnation, to increase revenues to the state and to its municipalities

and to achieve stable local economies.

* Based upon the experience of the past, most recently during the

periods of illiquidity which occurred in nineteen hundred sixty-six and

again in nineteen hundred sixty-nine, shortages of funds for residential

mortgages in the private banking system can be expected to recur from

time to time in varying degrees of severity with the adverse

consequences described above. To avoid or minimize such consequences, to

bring greater stability to the residential construction industry and

related industries, and thus to assure a steady flow of production of

new housing units, there should be created a corporate governmental

agency to be known as the "state of New York mortgage agency" which,

through issuance of bonds and notes to the private investing public

during periods when there is an inadequate supply of credit available

for new loans for residential housing and housing improvement purposes,

may (i) purchase existing mortgages from banks and direct an amount

equal to the proceeds from the liquidated mortgage investments into new

mortgages on residential family dwelling units, (ii) purchase new

mortgages on residential family dwelling units, (iii) purchase new

housing loans for the rehabilitation or improvement of residential

family dwelling units, and (iv) purchase lease-to-own mortgage loans.

* NB Effective until July 23, 2027

* Based upon the experience of the past, most recently during the

periods of illiquidity which occurred in nineteen hundred sixty-six and

again in nineteen hundred sixty-nine, shortages of funds for residential

mortgages in the private banking system can be expected to recur from

time to time in varying degrees of severity with the adverse

consequences described above. To avoid or minimize such consequences, to

bring greater stability to the residential construction industry and

related industries, and thus to assure a steady flow of production of

new housing units, there should be created a corporate governmental

agency to be known as the "state of New York mortgage agency" which,

through issuance of bonds and notes to the private investing public, may

purchase existing mortgages from banks within the state during periods

when there is an inadequate supply of credit available for new

residential mortgage loans and direct an amount equal to the proceeds

from the liquidated mortgage investments into new mortgages on

residential real property for family units.

* NB Effective July 23, 2027

It is further found and declared that in addition to issuance of bonds

and notes for such purposes, the accessibility of credit available for

new loans for residential housing and housing improvement purposes will

also be increased by making available to the people of the state to the

fullest extent possible the benefit of federal programs providing

credits against income tax for a portion of interest paid on residential

mortgage and housing loans.

The secondary mortgage market provided by the corporate governmental

agency created by this title is hereby found and determined to be an

appropriate and effective means of making residential mortgages a more

attractive investment for the private banking system, of reducing the

volatility of mortgage flows over the business cycle, and of providing

greater stability for the economies of the state and its municipalities.

It is further found and determined that it has long been the public

policy of the state to encourage every student who has the desire and

capacity to pursue a post-secondary education. To this end, the state

has developed one of the foremost systems of public higher education in

the nation, as well as a substantial program of grants and loans to help

finance the education of students attending both public and private

post-secondary educational institutions.

Nevertheless, the rising costs to students of post-secondary education

are placing the goal of such study beyond the financial reach of a

growing proportion of our potential student population, particularly

those young men and women coming from families of low- and

middle-income. To effectively meet this fiscal crisis in post-secondary

education, which is contrary to the general welfare of our citizens, it

is hereby found and determined that the student loan programs in the

state should be restructured to make available to every student

financial assistance in the attainment of his college or career

education and that the state of New York mortgage agency should be

authorized to issue its bonds and notes for the purpose of making

available funds with which to make available such student loans.

It is further found and determined that there is a need to establish a

program to assist homeowners in the state of New York who have been

affected by the national mortgage crisis who are either delinquent on

their mortgage payments or are in danger of going into default because

of economic hardship, as such term is defined under the agency's

guidelines, in consultation with the advisory council established in

subdivision three of section twenty-four hundred five-f of this part,

who may lose their homes to foreclosure, or who may have abandoned their

homes due to economic hardship and who may benefit from assistance. In

addition, the existence of vacant, abandoned, distressed, dilapidated or

reasonably beyond repair properties may contribute to the persistence of

conditions that increase blight and add to the deterioration of the

quality of the environment and living conditions of a large number of

persons residing in the state. To address these conditions, it is hereby

found and determined that the state of New York mortgage agency shall be

authorized to create and manage a fund to acquire residences and to

purchase mortgages and mortgage notes, or to provide monies to eligible

institutions to acquire residences and to purchase mortgages and

mortgage notes and to carry out such other functions in connection with

such acquisitions as are necessary to accomplish the purposes of this

paragraph. In connection therewith, the state of New York mortgage

agency shall be authorized to create a subsidiary corporation to carry

out the program authorized under this paragraph.

It is further found and determined that there is a shortage of

adequate funds to assist in the new construction of modular and

manufactured housing, and to assist in the purchase of existing modular

and manufactured housing.