N.Y. Real Property Tax Law § 953: Duties and responsibilities of mortgage investing institutions

§ 953. Duties and responsibilities of mortgage investing institutions.

1. Every mortgage investing institution shall make all payments for

taxes for which they hold real property tax escrow accounts, in a timely

manner.

2. Every mortgage investing institution subject to the provisions of

section fourteen-b of the banking law shall pay at least the minimum

rate of interest on each real property tax escrow account as prescribed

therein except that any such mortgage investing institution shall not be

required to pay such minimum rate of interest on real property tax

escrow accounts established for non-mortgagors.

3. Every mortgage investing institution shall deposit funds from a

real property tax escrow account of a mortgagor in a banking institution

whose deposits are insured by a federal agency or a licensed branch of a

foreign banking corporation whose deposits are insured by a federal

agency. Notwithstanding the foregoing provisions of this subdivision,

the superintendent of financial services shall have the power to exempt

from the requirements of this subdivision any banking organization which

does not receive deposits or share accounts from the general public.

4. No mortgage investing institution shall impose a service charge or

any other fee in connection with the maintenance of a real property tax

escrow account nor, as provided in section two hundred fifty-four-d of

the real property law, shall a fee be imposed for direct payment of real

property taxes.

5. A mortgage investing institution may debit a mortgagor's real

property tax escrow account for payments of taxes only if actual payment

for such taxes is made within twenty-one days after such debit.

6. Every mortgage investing institution shall, at least annually and

without charge to the mortgagor, provide to the mortgagor an analysis of

the real property tax escrow account of the mortgagor. Such analysis

shall contain, for the twelve month period covered by the analysis, at

least: (i) interest earned; (ii) the amount of taxes paid from the real

property tax escrow account; and (iii) the account balance as of the

beginning of the period the analysis covers and the ending account

balance as of a specified date within forty-five days preceding the date

of the analysis. In addition, the mortgage investing institution shall,

upon request by the mortgagor, provide to the mortgagor without charge

the date or dates of the payment of taxes from such real property tax

escrow account. The information required by this subdivision may be

provided in notices otherwise required by federal or state law,

regulation or rule to be sent on at least an annual basis to the

mortgagor. The analysis shall also contain the following information in

at least eight point bold face type in substantially the following

language:

(a) that the mortgage investing institution is obligated to make all

payments for taxes for which the real property tax escrow account is

maintained and that if any such payments are not timely, the mortgage

investing institution is responsible for making such payments including

any penalties and interest;

(b) that the mortgagor is obligated to pay one-twelfth of the taxes

each month to the mortgage investing institution which is deposited into

the real property tax escrow account, unless there is a deficiency or

surplus in the account, in which case a greater or lesser amount may be

required;

(c) if the mortgage investing institution is subject to the provisions

of subdivision three of this section, that the mortgage investing

institution must deposit the escrow payments made by the mortgagor in a

banking institution or a licensed branch of a foreign banking

corporation whose deposits are insured by a federal agency; and

(d) that the mortgage investing institution cannot impose any fees

relating to the maintenance of the real property tax escrow account.

6-a. Every mortgage investing institution shall upon the request of a

borrower who has been notified of the granting of an exemption pursuant

to section four hundred twenty-five of this chapter to review the

expected real property tax liability which is assessable against a

property which is a one, two or three family dwelling and which is the

primary residence of the borrower. In any case, where as the result of

the granting of such exemption an overage in the escrow shall exist, the

owner shall be entitled to a proportionate reduction in the amount such

mortgage investing institution is authorized to collect and deposit on a

monthly basis into an escrow account to insure the payment of real

property taxes. This review shall be considered maintenance of a real

property tax escrow account.

7. Every mortgage investing institution shall provide written notice

to a mortgagor no later than ten business days after the transfer to

another mortgage investing institution of the right to receive all

payments from the mortgagor, including payments made into the real

property tax escrow account, which notice shall include the name,

address and telephone number of the mortgage investing institution to

which such rights have been transferred. Upon request by the mortgagor,

the mortgage investing institution shall advise the mortgagor of the

amount of money in such account as of the date of such transfer. Every

mortgage investing institution shall remain fully liable to pay any

taxes which are due and payable prior to the date of such transfer, and

the mortgage investing institution to which such rights have been

transferred shall be liable to pay any taxes which are due and payable

after the date of such transfer, unless otherwise agreed among the

parties to the transfer.

8. Every mortgage investing institution shall, no later than

twenty-one days after the final payment of the mortgage loan, where the

mortgagor retains ownership of the property, send to the mortgagor a

written statement that shall include, but not be limited to the

following information: (a) that the real property tax escrow account has

been or will be terminated (whichever is applicable); and (b) that

unless the mortgagor establishes a new real property tax escrow account

with a mortgage investing institution, the mortgagor will be obliged to

pay to the appropriate collecting officers taxes becoming due

thereafter. The written notice shall also set forth the effective date

of the termination and shall provide the name, address and telephone

number of each collecting officer or office and advise the mortgagor to

contact such officer or office for tax billing information.

8-a. Any mortgage investing institution which does not comply with the

provisions of subdivision eight of this section shall be financially

responsible for interest or penalties charged a former mortgagor of such

institution by a taxing municipality, county, and/or delinquent tax

enforcement agency for non-payment or late payment of real property

taxes in the first taxable year following satisfaction of the mortgage

held by such institution.

9. Every mortgage investing institution shall, no later than the

twenty-fifth day of each month, report to the county director of real

property tax services, or the commissioner of finance for property

located in the city of New York, on a form prescribed or approved by the

commissioner, the creation of a real property tax escrow account, or any

change of a tax billing address required by a transfer or termination of

a real property tax escrow account pursuant to subdivisions seven and

eight of this section, occurring during the prior month with respect to

real property located in such county or city, as the case may be. The

county director or the commissioner of finance of the city of New York

shall thereupon furnish a copy of such report to the person or persons

having custody and control of the appropriate assessment roll, tax roll

or data file, as defined in section fifteen hundred eighty-one of this

chapter, and such person or persons are hereby authorized and directed

upon receipt of such report to enter the appropriate tax billing address

on such assessment roll, tax roll or data file.