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American College of Mortgage Attorneys — Partner with the Best®

Formed in 1974, the American College of Mortgage Attorneys (ACMA) is comprised of over 500 lawyers in North America who are experts in mortgage law.

United States

New York

Mortgage, separate instrument, i.e., note or bond evidences debt.

SECURITY INSTRUMENT USED

Writing subscribed by person conveying interest or lawful agent, who is authorized by writing (General Obligations Law (“GOL”) &sect;&nbsp;5-703). The signature of mortgagor must be acknowledged. See TRANSFER TAX (below) for recording requirements.

RECORDING REQUIREMENTS

STATUTES TO BE WAIVED

Depends upon identity of mortgagee, i.e., federally-related mortgage loan, or state law.

UNUSUAL TREATMENT OF STANDARD PROVISIONS

Building loans must comply with requirements of the Lien Law (Lien Law &sect;&sect;&nbsp;2 and 22) to protect against loss of lien priority for advances made prior to the filing of a mechanic's lien. A mortgage loan that funds capital improvements (including tenant improvements), including through an escrow or holdback, could be deemed to be a building loan. Lenders should be warned that failure to comply with the express requirements of the Lien Law may result in loss of priority. Such requirements include, among others, filing a Building Loan Agreement with the County Clerk. When the mortgage is not a building loan mortgage, priority for future advances within 30 years of the recording of the mortgage is afforded for such future advances (Real Property Law (“RPL”) &sect;&nbsp;281, “Credit line mortgages”). Section&nbsp;281 does not afford priority for future advances over mechanics' liens, real estate taxes, or federal tax liens.&nbsp;

SECURING FUTURE ADVANCES

Covered by standard mortgage form.

SECURING ADDITIONAL ADVANCES TO PROTECT COLLATERAL, INCLUDING PAYMENT OF TAXES AND INSURANCE

TRUSTEE UNDER DEED OF TRUST: N/A.

TRUSTEE UNDER DEED OF TRUST N/A.

6 years (CPLR &sect; 213(4)). On December 30, 2022, Governor Hochul signed the New York Foreclosure Abuse Prevention Act (the “Abuse Prevention Act”). The Abuse Prevention Act aims to prevent abusive foreclosure practices by mortgage lenders and overrules the decision by the Court of Appeals in Freedom Mortg. Corp. v. Engel, 169 N.E.3d 912 (N.Y. 2021), reargument denied, 169 N.E.3d 1229 (N.Y. 2021). The Abuse Prevention Act limits a lender's ability to unilaterally toll the statute of limitations once a mortgage loan has been accelerated and a foreclosure action has been commenced through a voluntary discontinuance of the action. Thus, in this case, the lender's unilateral action will not extend the statute of limitations.

STATUTE OF LIMITATIONS PERIOD

Foreclosure is by judicial action (Real Property Actions and Proceedings Law (“RPAPL”) Article 13). Mortgagee must elect to either sue on the debt or to foreclose the property. If foreclosure is elected, all necessary parties must be served. There are stringent requirements to be followed in the foreclosure process including, in some instances, minutiae such as font size and paper color in required notices. Foreclosure by power of sale is not available in New York.

BRIEF DESCRIPTION OF PROCEDURE

TYPICAL LENGTH OF PROCEDURE

None, but in computing deficiency judgment, court will determine “fair and reasonable market value” of the premises. The deficiency is the difference between the amount of the foreclosure judgment with interest, plus the amount (with interest) of any prior liens and encumbrances on the premises and the cost and disbursements of the foreclosure action, including the referee's fee and disbursements, less (x)&nbsp;the market value of the premises as determined by the court or (y)&nbsp;the foreclosure sales price, whichever is higher. RPAPL &sect;&nbsp;1371(2).

FORECLOSURE BID REQUIREMENTS

The owner of equity of redemption has the right to redeem at any time before the actual bidding commences at the auction sale under a judgment of foreclosure. RPAPL &sect;&nbsp;1341. In addition, a person served with a summons other than by personal delivery to him or his designated agent for service who does not appear may be allowed to raise a defense within 1 year, but not more than 5 years, after he obtains knowledge of the entry of judgment. If the defense is successful, the court may direct restitution (Civil Practice Law and Rules (“CPLR”) &sect;&nbsp;317).

REDEMPTION PERIOD AND PRICE

Right of redemption cannot be waived. All junior parties who claim through or under the mortgagee have a right to redeem at any time prior to the actual auction sale.

WAIVER OF REDEMPTION; REDUCTION OF REDEMPTION PERIOD

New York has an election of remedies rule and anti-deficiency statute. RPAPL &sect;&nbsp;1301 requires that a mortgagee generally elect to sue at law on the note or on any guaranty of the note or in the alternative, in equity to foreclose the mortgage. If the mortgagee elects to sue on the note or the guaranty or both, it may not bring a foreclosure proceeding without leave of court unless a final judgment has been rendered and an execution, which can only be directed at the property of the defendant other than the mortgaged premises (CPLR &sect; 5236(b)), has been returned wholly or partially unsatisfied. If the mortgagee elects to foreclose, it may recover any deficiency from the maker or guarantor of the note by joining the maker or guarantor as a defendant in the foreclosure action and moving for a deficiency judgment within 90 days after the foreclosure sale is completed (RPAPL &sect;&nbsp;1371). Failure to seek a deficiency judgment against the maker of the note or any guarantor in the foreclosure action under RPAPL Section&nbsp;1371 bars any further action for a deficiency. However, even if a motion for a deficiency is not made or if the motion is denied, the court may direct that all monies remaining with a Receiver of Rents, after payment of Receiver fees and expenses, be paid to the mortgagee to the extent of the amount by which the judgment exceeds the amount paid for the property upon the sale (RPAPL &sect;&nbsp;1371(4)). While New York courts have held that RPAPL Section 1371 rules concerning deficiency judgments do not apply to mortgaged property located outside of New York, some courts in jurisdictions other than New York have held that a mortgagee's choice of New York law provision contained in the mortgage note would require the application of the New York “market value” deficiency rules to such out-of-state foreclosure. See Chase Manhattan Bank, N.A. v. Greenbriar N. Section II, 835 S.W.2d 720, 726-27 (Tex. App. 1992); Citibank, N.A. v. Errico, 251 N.J. Super. 236, 241-48 (1991). See FORECLOSURE BID REQUIREMENTS (above). New York election of remedies does not prevent mortgagee from suing guarantor in a state other than New York, if the guaranty is governed by the law of that other state.

DEFICIENCIES

Varies according to whether the lease is subordinate to the mortgage (which depends on priority and/or express language of the lease) and/or whether a non-disturbance agreement exists.

EFFECT OF FORECLOSURE UPON LEASES

RPAPL Sections&nbsp;1302 - 1304 now require that a pre-foreclosure notice be sent at least 90 days before a mortgage lender commences legal action against a borrower under any home loan. The pre-foreclosure notice informs homeowners of steps they can take to avoid foreclosure, including working with their lender to find an affordable solution to foreclosure and consulting with a not-for-profit housing counselor. The requirement to send the notice applies to assignees of mortgages as well as the original lender. Notice must be sent to the borrower with respect to any home loan and is not limited to borrowers whose mortgage principal amount is less than the FNMA conforming loan size limit.

FORECLOSURE OF HOME LOANS

The New York State Home Equity Theft Protection Act amended Section 595-a of the Banking Law, Section 265-a of the RPL, and added Section 1303 to the RPAPL (the “Act”). The Act affects 1 - 4 family dwellings. It requires written disclosure to homeowners regarding the terms of a title transfer that occurs when a home is in foreclosure and provides the homeowner with the right to cancel the transaction within 5 days of signing the agreement. A typical scam occurs as follows: the predator acquires a deed to the property, promising that title will be re-conveyed when the troubled homeowner's credit is restored. The predator then refinances the property and cashes out the homeowners equity, and walks away from the property. The Act prohibits making false statements with the intent to defraud the homeowner and mandates a consumer education notice to be sent to all homeowners in foreclosure, warning them about these types of scams. The Act provides for both civil and criminal penalties for violations. Under the Act, mortgage lenders are required to include with their foreclosure notices relevant information (printed in English and Spanish on colored paper and in 14-point bold print) identifying state agencies that can assist the homeowner. The notice warns the homeowner about being approached by people offering to “save their home.” The notice must follow the statute verbatim. Failure to do so could nullify a foreclosure. Notice must also be provided to tenants at the residence. Under the Act, a default exists if a homeowner is 2 months or more behind in mortgage payments. From a title perspective, RPL &sect; 265-a(8)(a) is problematic as it makes any transfer that is in material violation of the Act voidable and rescindable by the transferor within 2 years of recording the deed.

NEW YORK STATE HOME EQUITY THEFT PROTECTION ACT

The maximum rate of interest that currently may be charged to individuals is 16% per annum (GOL &sect;&nbsp;5-501 and Banking Law &sect;&nbsp;14-a), and to a corporation or on a loan exceeding $250,000 other than secured by a 1- or 2-family residence, not to exceed 25% per annum (GOL &sect;&nbsp;5-501(6)(a) and Penal Law &sect;&sect;&nbsp;190.40 and 190.42). With very limited exceptions, an interest rate in excess of 25% per annum will constitute criminal usury. No maximum rate of interest (civil or criminal) applies to loans in the amount of $2,500,000 or more (GOL &sect;&nbsp;5-501(6)(b)).

USURY CEILING

Numerous exemptions exist for various types of institutional lenders, federally-related mortgage loans, and the like. Corporations and limited liability companies generally cannot assert usury defenses. (GOL &sect;&nbsp;5-521(1) and Ltd. Liab. Co. Law &sect;&nbsp;1104).

USURY EXEMPTIONS

New York adopted revised UCC Article 9 and the National Uniform Commercial Code Financing Statement Forms as promulgated by the International Association of Commercial Administrators effective July 1, 2001. In many (but not all) cases, the law of the jurisdiction in which the debtor is “located” will govern perfection and priority issues. The filer should consult Part 3 of Revised Article 9 to determine whether the laws of New York State, or the laws of some other state, govern perfection and priority issues for the filer's transaction. If the laws of New York State govern perfection and priority, then Section 9-501 governs the place of filing. The 2010 Amendments to Article 9 of the UCC (“2010 Amendments”), recommended by the Uniform Law Commission (“ULC”), were adopted, in part, with the changes applying to transactions entered into on or after December 17, 2014. New York adopted ULC's “Alternative A”; the sole safe harbor for an individual's name is the name that appears on an unexpired driver's license or non-driver photo identification card. The law does not include the ULC Part 8 transition rules. Amended forms of financing statements have not been issued by New York's Department of State. Subsection 9-501(a)(1) provides that the office in which to file a financing statement to perfect a security interest or agricultural lien is the office designated for the filing or recording of a mortgage on the related real property (this is the office of the County Clerk or New York City Register) if (1) the collateral is as-extracted collateral or timber to be cut or (2)&nbsp;the financing statement is filed as a fixture filing and the collateral is goods that are or are to become fixtures or (3)&nbsp;the collateral is the stock and proprietary lease for a cooperative apartment unit (a “Cooperative Interest”). Subsection 9-501(a)(2) provides that the office in which to file a financing statement to perfect a security interest is the office of the Secretary of State in all other cases. When a financing statement is filed against a “Cooperative Interest” and a “Cooperative Addendum” is filed with the financing statement, the financing statement remains effective for 50 years or until a termination statement is filed. If a Cooperative Addendum is not filed, the financing statement is effective for 5 years unless extended (UCC &sect;&nbsp;9-515).

LOCATIONS FOR FILING

A mortgage may also constitute a security agreement granting a security interest in fixtures if such fixtures do not include consumer products. Generally, a mortgage in New York covers items of personal property affixed to or used in conjunction with real estate, whether or not a separate security filing has been accomplished.

SECURITY INSTRUMENT AS FIXTURE FILING

Financing Statements (UCC-1): With certain exceptions, including that of a financing statement filed with a Cooperative Addendum to perfect a lien on a Cooperative Apartment, financing statements are effective for 5 years from the date of filing, unless a continuation statement (UCC-3) is filed prior to the expiration date. Any such continuation statement must be filed within the time period provided by UCC &sect;&nbsp;9-515. Succeeding continuation statements may be filed prior to the expiration of the 5-year period in the same manner to continue the effectiveness of the original statement.

RENEWAL

UNUSUAL PROVISIONS OR REQUIREMENTS: N/A.

UNUSUAL PROVISIONS OR REQUIREMENTS N/A.

STATUTES TO BE WAIVED: N/A.

STATUTES TO BE WAIVED N/A.

A motion for a deficiency under RPAPL &sect;&nbsp;1371 is the customary means by which a mortgagee seeks to recover a post-foreclosure deficiency from the maker or guarantor of a mortgage note. If no such motion is made, the sale proceeds are deemed to fully satisfy the mortgage debt and the mortgagee may not recover any deficiency from either the maker or the guarantor in any other action or proceeding.

SPECIAL PROBLEMS IN ENFORCEMENT OF GUARANTY

RPAPL &sect;&nbsp;1921 and RPL &sect;&nbsp;275 require that after principal and interest and other amounts secured by a mortgage have been paid, the mortgagee must execute and acknowledge a satisfaction and thereafter within 30 days arrange to have the satisfaction of the mortgage presented for recording in the county where the mortgage was recorded, or if requested by the mortgagor or mortgagor's designee, deliver same to the mortgagor or the mortgagor's designee. If the mortgaged property is improved by a 1-6-family owner-occupied residence, failure to comply with these provisions within 90 days renders the mortgagee liable to the mortgagor for damages ($500 or the economic loss, whichever is greater) (RPAPL &sect;&nbsp;1921(4)). Noncompliance with these provisions with regard to mortgages securing all other property results in increasing liability of the mortgagee to the mortgagor: $500 after 30 days, $1,000 after 60 days and $1,500 after 90 days (RPAPL &sect;&nbsp;1921(1)).

REQUIREMENTS FOR RELEASE OF LIEN

Not applicable as an action to foreclose a mortgage is an equitable action and does not result in a “money judgment” within the definition of the Homestead Exemption (CPLR &sect;&nbsp;5206).

HOMESTEAD ISSUES

COMMUNITY PROPERTY

In 1998, the Committee on Real Property Law of the Association of the Bar of the City of New York and the Attorney Opinion Letters Committee of the Real Property Law Section of the New York State Bar Association issued a Joint Mortgage Loan Opinion Report addressing practice norms in connection with mortgage loans secured by property in New York. The report included a sample opinion letter for a commercial mortgage loan [https://www2.nycbar.org/RealEstate/Forms/opinion_pdf.pdf]. Opinion practice has evolved since 1998, with certain changes reflected in the 2012 and 2016 Opinion Reports to which ACMA was a party.

MORTGAGE LAW OPINION PRACTICE

Persons or entities negotiating commercial mortgages “on behalf of another for a fee” must obtain a real estate broker's license from the New York Department of State's Division of Licensing Services (RPL &sect; 440-a). Persons or entities making more than three mortgage loans to natural persons for primarily family or household use (a “Residential Mortgage Loan”) in a calendar year (or more than five such loans in a two-year period) must obtain a mortgage banker license from the Superintendent of the New York Department of Financial Services. Persons or entities engaging in the business of soliciting, processing, placing, or negotiating a Residential Mortgage Loan must register as a mortgage broker with the Superintendent. (Banking Law &sect; 590(2)).

LENDER QUALIFICATIONS/LICENSURE

The mortgage tax rate for each jurisdiction in the State is as follows: <table>
 <thead>
 <tr>
 <td width="427">
 JURISDICTION
 </td>
 <td width="211">
 TAX RATE<a href="#_ftn20" name="_ftnref20">[20]</a>
 </td>
 </tr>
 </thead>
 <tbody>
 <tr>
 <td width="427">
 Chemung, Chenango, Jefferson, Montgomery, Otsego, St. Lawrence, Tioga and Ulster Counties
 </td>
 <td width="211">
 0.75%
 </td>
 </tr>
 <tr>
 <td width="427">
 Dutchess, Nassau, Orange, Putnam and Suffolk Counties
 </td>
 <td width="211">
 1.05%
 </td>
 </tr>
 <tr>
 <td width="427">
 Albany, Cattaraugus, Chautauqua, Columbia, Essex, Genesee, Greene, Livingston, Rensselaer, Schenectady, Steuben, Warren, Washington, Wayne and Wyoming Counties
 </td>
 <td width="211">
 1.25%
 </td>
 </tr>
 <tr>
 <td width="427">
 Westchester (except City of Yonkers) and Rockland Counties
 </td>
 <td width="211">
 1.30%
 </td>
 </tr>
 <tr>
 <td width="427">
 City of Yonkers
 </td>
 <td width="211">
 1.80%
 </td>
 </tr>
 <tr>
 <td width="427">
 All other counties (except NYC)
 </td>
 <td width="211">
 1%
 </td>
 </tr>
 </tbody>
</table>

MORTGAGE TAX

NY Tax Law &sect; 253 et seq. <table>
 <tbody>
 <tr>
 <td width="213">
 PROPERTY TYPE
 </td>
 <td width="213">
 MORTGAGE AMOUNT
 </td>
 <td width="213">
 TAX RATE
 </td>
 </tr>
 <tr>
 <td width="213">
 All types
 </td>
 <td width="213">
 Less than $500,000
 </td>
 <td width="213">
 2.05%<a href="#_ftn21" name="_ftnref21">[21]</a>
 </td>
 </tr>
 <tr>
 <td width="213">
 Residential (Except Cooperative Apartments)
 </td>
 <td width="213">
 $500,000 or More
 </td>
 <td width="213">
 2.175%<a href="#_ftn22" name="_ftnref22">[22]</a>
 </td>
 </tr>
 <tr>
 <td width="213">
 Cooperative Apartments
 </td>
 <td width="213">
 Not Applicable
 </td>
 <td width="213">
 Not Applicable
 </td>
 </tr>
 <tr>
 <td width="213">
 Commercial
 (Vacant Land, etc.)
 </td>
 <td width="213">
 $500,000 or More
 </td>
 <td width="213">
 2.80%
 </td>
 </tr>
 </tbody>
</table> However, with respect to (a) mortgage covering property improved or to be improved by 6 or fewer residential dwelling units, each with separate cooking facilities or (b) a mortgage made by a non-profit organization no part of the net earnings of which inure to the benefit of any officer, director, or member and that is exempt from taxation under IRC &sect; 501, the mortgagee must pay a portion of the mortgage recording tax equal to 0.25% of the secured principal (Tax Law &sect; 253-2a). A mortgage may not be enforced unless all mortgage recording tax has been paid (Tax Law &sect;&nbsp;258). In addition, failure to pay the proper amount of mortgage recording tax will also render unenforceable “the debt or obligation secured by any such mortgage” (id.). If the mortgage recording tax is unpaid due to failure to record the mortgage or a lost or destroyed mortgage, a holder may nevertheless have the opportunity to enforce the mortgage if it provides evidence to a recording officer or tax commission as to facts affirming (1) the unrecorded instrument has been lost or destroyed, and (2)&nbsp;the tax amount then owing, which may then be paid. See CRR-NY &sect; 650.2. Generally, when a commercial mortgage (and, if the mortgagee will cooperate, a residential mortgage of significant size) is refinanced, an existing mortgage is assigned to a new mortgagee in lieu of being satisfied. When a mortgage is assigned, mortgage recording tax is payable only on the “new money” (the amount by which the principal amount of the new loan exceeds the then-outstanding principal balance secured by the mortgage being assigned to the new mortgagee). Assigned mortgages and a new mortgage on which mortgage recording tax is paid may be consolidated to form a single mortgage lien. Mortgagees are under no obligation to agree to assign their mortgages to a new lender unless the obligation is set out in the loan documentation. Mortgages securing a revolving line of credit create additional mortgage recording tax obligations in New York State. Generally, the mortgage recording tax is imposed on each loan advance, including each advance under a revolving credit loan secured by a mortgage. Absent statutory protection, once the loan is advanced and then paid down, a re-advance of any portion of the maximum principal amount of the revolving facility is again subject to mortgage recording tax even if mortgage recording tax was paid on the maximum principal amount of the loan facility when the mortgage was recorded. Section 253-b of the New York Tax Law provides statutory benefits to two categories of revolving loans: (i)&nbsp;loans secured by 1-6-family owner-occupied residences, and (ii)&nbsp;commercial loans for under $3,000,000. Only in these circumstances, once mortgage recording tax is paid on the maximum principal amount of a “credit line” mortgage, no further mortgage recording tax will be payable on future advances or re- advances.

Mortgage Recording Tax in New York City

Upon a foreclosure or a deed in lieu of foreclosure, New York State's transfer tax is imposed at the rates set forth below, as follows: <table>
 <tbody>
 <tr>
 <td width="319">
 TYPE OF GRANTEE
 </td>
 <td width="319">
 CONSIDERATION FOR CONVEYANCE
 </td>
 </tr>
 <tr>
 <td width="319">
 1.&nbsp;&nbsp; Mortgagee or an entity wholly owned by Mortgagee (non-recourse debt)
 </td>
 <td width="319">
 The higher of either:
 a) Judgment amount or
 b) Bid price
 </td>
 </tr>
 <tr>
 <td width="319">
 2.&nbsp;&nbsp; Mortgagee or an entity wholly owned by Mortgagee (recourse debt)
 </td>
 <td width="319">
 The lower of either:
 a) Fair market value; or
 b) Judgment amount or bid price (whichever is higher)
 </td>
 </tr>
 <tr>
 <td width="319">
 3.&nbsp;&nbsp; Unrelated to Mortgagee (either nonrecourse or recourse debt) acquiring title either by being successful bidder at auction or taking an assignment of bid from the mortgagee
 </td>
 <td width="319">
 Bid Price
 </td>
 </tr>
 </tbody>
</table> &nbsp; If the property is located within the City of New York, the New York City Real Property Transfer Tax is imposed based on the amount of the bid for a foreclosure deed and based on the outstanding mortgage indebtedness for a deed in lieu of foreclosure. After a deed in lieu of foreclosure, the mortgage may be foreclosed to cut off junior liens, but it may not be further assigned or modified without the payment of additional mortgage recording tax. In addition, the “consideration” on which the transfer tax will be based will include any superior liens that will remain on the property following foreclosure or any deed that is delivered in lieu of foreclosure (e.g., superior mortgages, mechanic's liens that are not subordinate to the mortgage and real estate taxes that are unpaid by the mortgagor).

TRANSFER TAX

NY State Consolidated Laws Article&nbsp;31 &sect;&nbsp;1400 et seq. The RETT is imposed as follows: <table>
 <tbody>
 <tr>
 <td width="213">
 Property Type 
 </td>
 <td width="213">
 Purchase Price Paid
 </td>
 <td width="213">
 Tax Rate
 </td>
 </tr>
 <tr>
 <td width="213">
 Residential (as defined below)
 </td>
 <td width="213">
 $3,000,000 or less
 </td>
 <td width="213">
 0.4%<a href="#_ftn23" name="_ftnref23">[23]</a>
 </td>
 </tr>
 <tr>
 <td width="213">
 Residential (as defined below)
 </td>
 <td width="213">
 More than $3,000,000
 </td>
 <td width="213">
 0.65%<a href="#_ftn24" name="_ftnref24">[24]</a>
 </td>
 </tr>
 <tr>
 <td width="213">
 Commercial
 </td>
 <td width="213">
 $2,000,000 or less
 </td>
 <td width="213">
 0.4%4
 </td>
 </tr>
 <tr>
 <td width="213">
 Commercial
 </td>
 <td width="213">
 More than $2,000,000
 </td>
 <td width="213">
 0.65%5
 </td>
 </tr>
 </tbody>
</table>

New York State Real Estate Transfer Tax (“RETT”)

Tax Law &sect; 1402a An Additional Tax (historically known as the “Mansion Tax”) of 1% is imposed on purchasers (including foreclosing lenders) of personal residences, including 1 to 3 family homes, condominiums or cooperative apartments (each, a “Residential Property”) of $1,000,000 or more.

New York State Additional Tax

Tax Law &sect; 1402b A Supplemental Tax is imposed on purchasers (including foreclosing lenders) of Residential Properties in New York City of $2,000,000 or more as follows: <table width="0">
 <tbody>
 <tr>
 <td width="209">
 Property Type
 </td>
 <td width="209">
 Purchase Price Paid
 </td>
 <td width="209">
 Tax Rate
 </td>
 </tr>
 <tr>
 <td width="209">
 Residential&nbsp;
 </td>
 <td width="209">
 Under $2,000,000&nbsp;
 </td>
 <td width="209">
 N/A&nbsp;
 </td>
 </tr>
 <tr>
 <td width="209">
 Residential&nbsp;
 </td>
 <td width="209">
 $2,000,000 - $2,999,999&nbsp;
 </td>
 <td width="209">
 0.25%&nbsp;
 </td>
 </tr>
 <tr>
 <td width="209">
 Residential&nbsp;
 </td>
 <td width="209">
 $3,000,000 - $4,999,999&nbsp;
 </td>
 <td width="209">
 0.50%&nbsp;
 </td>
 </tr>
 <tr>
 <td width="209">
 Residential&nbsp;
 </td>
 <td width="209">
 $5,000,000 - $9,999,999&nbsp;
 </td>
 <td width="209">
 1.25%&nbsp;
 </td>
 </tr>
 <tr>
 <td width="209">
 Residential&nbsp;
 </td>
 <td width="209">
 $10,000,000 -&nbsp;$14,999,999&nbsp;
 </td>
 <td width="209">
 2.25%&nbsp;
 </td>
 </tr>
 <tr>
 <td width="209">
 Residential&nbsp;
 </td>
 <td width="209">
 $15,000,000 - $19,999,999&nbsp;
 </td>
 <td width="209">
 2.50%&nbsp;
 </td>
 </tr>
 <tr>
 <td width="209">
 Residential&nbsp;
 </td>
 <td width="209">
 $20,000,000 - $24,999,999&nbsp;
 </td>
 <td width="209">
 2.75%&nbsp;
 </td>
 </tr>
 <tr>
 <td width="209">
 Residential&nbsp;
 </td>
 <td width="209">
 $25,000,000 or more&nbsp;
 </td>
 <td width="209">
 2.90%&nbsp;
 </td>
 </tr>
 </tbody>
</table> &nbsp;

New York State Supplemental Tax (Affects Certain NYC Transactions)

Adm. Code 11-2101 et seq. <table width="0">
 <tbody>
 <tr>
 <td width="207">
 Property Type&nbsp;
 </td>
 <td width="207">
 Purchase Price&nbsp;Paid&nbsp;
 </td>
 <td width="207">
 Tax Rate&nbsp;
 </td>
 </tr>
 <tr>
 <td width="207">
 Residential and Commercial&nbsp;
 </td>
 <td width="207">
 $25,000 or less&nbsp;
 </td>
 <td width="207">
 N/A&nbsp;
 </td>
 </tr>
 <tr>
 <td width="207">
 Residential&nbsp;
 </td>
 <td width="207">
 $25,001 - $500,000&nbsp;
 </td>
 <td width="207">
 1%&nbsp;
 </td>
 </tr>
 <tr>
 <td width="207">
 Residential&nbsp;
 </td>
 <td width="207">
 More than $500,000&nbsp;
 </td>
 <td width="207">
 1.425%4&nbsp;
 </td>
 </tr>
 <tr>
 <td width="207">
 Commercial&nbsp;
 </td>
 <td width="207">
 $25,001 - $500,000&nbsp;
 </td>
 <td width="207">
 1.425%&nbsp;
 </td>
 </tr>
 <tr>
 <td width="207">
 Commercial&nbsp;
 </td>
 <td width="207">
 More than $500,000&nbsp;
 </td>
 <td width="207">
 2.625%&nbsp;
 </td>
 </tr>
 </tbody>
</table> New York State and New York City transfer taxes also apply to the transfer of an economic interest in an entity owning real property, and to the assignment or surrender of many leases. The grant of a lease for more than 49 years, including extensions and renewal, or a lease accompanied by an option to purchase, may be subject to New York State transfer tax. New York State's transfer tax is payable within 15 days of the date of transfer. New York City's transfer tax will often apply to the extent that the tenant pays “key money” for the lease and potentially in certain other circumstances, and is due within 30 days of transfer. Several counties and cities throughout the State impose additional local transfer taxes. There is also a transfer tax imposed in the Peconic Region of Suffolk County. A Peconic Bay Region Community Preservation Fund tax return must be submitted to the Suffolk County Clerk. New York City (all conveyances, including foreclosures and deeds in lieu of foreclosure): The offices of the New York City Register will only accept for recording documents (New York State (TP-584) and New York City (RPTT) transfer tax forms, the Real Property Transfer Report (RP-5217NYC), the Smoke Alarm Detector affidavit, the Property Owner's Registration Form and the Customer Registration Form for Water and Sewer Billing) for which a Cover Page, a Payment Sheet, and transfer tax forms have been generated in the City's Internet-based Automated City Register Information System (“ACRIS”). The signed transfer tax forms, printed from ACRIS, each with an imprinted Tax Transaction ID, are the only transfer tax forms accepted. Only forms that have been completed as required by ACRIS will be printed. Editing any completed form, such as changing the purchase price, must be done in ACRIS for the form to be accepted. Different requirements apply in the Borough or County of Richmond (Staten Island). Westchester County (all conveyances): The Westchester County Clerk will only accept for recording documents for which a Cover Page and transfer tax forms have been generated in the County Clerk's Internet-based Property Records Electronic Portal (“PREP”) system. Proof of the payment to the City Comptroller of Mount Vernon or Yonkers must be submitted to the Westchester County Clerk to record a deed transferring property in either of those cities. Mount Vernon and Yonkers have their own transfer tax returns.

New York City Real Property Transfer Tax (“RPT”)

New York would generally look to New York law for purposes of foreclosure since it is a judicial action under New York State law. New York also has a statute that generally validates New York choice of law clauses for business transactions above $250,000. GOL &sect;&nbsp;5-1401. New York will also validate the forum of New York courts for the litigation of any dispute involving a claim of $1,000,000 or more, provided the dispute arises out of a contract, agreement or undertaking whereby the foreign party agreed to submit to the jurisdiction of New York. GOL &sect; 5-1402.

ENFORCEABILITY OF AGREEMENT OF BORROWER AND LENDER AS TO CHOICE OF LAW PROVISIONS

Once a mortgage foreclosure action is commenced, a receiver is available and may be sought ex parte provided the mortgage contains provisions allowing for the appointment of a receiver ex parte in a foreclosure proceeding (RPAPL &sect;&nbsp;1325). Under certain circumstances, though, the court may, in spite of such provision, deny the application or require a proceeding on notice. If the mortgage does not provide for the appointment of a receiver, the application must be on notice and the applicant must show that a receiver is a necessity to preserve the property and that the land represents inadequate security.

RECEIVER AVAILABLE

There are no unusual provisions or requirements for modifications of existing mortgage loans.

MODIFICATION

New York Navigation Law&nbsp;provides for&nbsp;a limited lien in a section regarding oil spill prevention, control and compensation. If the State uses monies from a fund established for cleanup, the fund has a lien upon the contaminated real property owned by a responsible person. Nav. Law &sect;&nbsp;181-a.1. The lien attaches when cleanup costs are incurred by the fund, the responsible person fails to pay for 90 days after written demand, and a notice of the lien is filed as provided in a related section. Nav. Law &sect;&nbsp;181-a.2. The lien is subordinate to the rights of any other person whose interest was perfected before the notice of lien was filed. Nav. Law &sect;&nbsp;181-A.4. Any amounts recovered to satisfy the lien are returned to the fund. Nav. Law &sect;&nbsp;181-E. New York's Environmental Conservation Law provides that a local government authority may seek a court order allowing the authority to conduct an environmental restoration investigation on real property pursuant to state environmental restoration laws. The costs of the environmental restoration investigation are added to the taxes owed to, and tax lien of, the local governmental authority. Envtl. Conserv. Law &sect;&nbsp;56-0508(1-5).&nbsp;That tax lien would have priority over all privately created interests in the property.

ENVIRONMENTAL LIENS

Inception of Lien: Labor and materials for which a mechanic's lien may be claimed must be of a permanent nature and result in a lasting and continuing benefit to the real property. Tools, supplies, and items normally associated with overhead and maintenance are generally not lienable. Items not actually furnished and delivered to the real property, but specifically manufactured for the project, are generally lienable. If a statutorily prescribed covenant is included in a deed or mortgage to the effect that the grantor or mortgagor will receive and hold the proceeds and advances as a trust fund to be applied first to the payment of the cost of the improvement, then the deed or mortgage would be superior to any notice of mechanics' lien filed thereafter (Lien Law &sect;&sect;&nbsp;5 10, 13 (3) (5)). See SECURING FUTURE ADVANCES (above) regarding the requirements for building loans to be superior in priority to mechanic's liens. Priority as to Removable Fixtures: A mortgage by its terms specifically extends its lien to any personalty that becomes affixed to the realty. An exception to this occurs when a separate security agreement as to fixtures and articles of personalty is entered into simultaneously with the mortgage. This separate agreement negates the intention to embrace personalty within the mortgage lien. LENDER'S TITLE INSURANCE POLICY:

LABOR AND MATERIAL LIEN CLAIM (“L&M LIEN”) PRIORITY ISSUES

The 2006 American Land Title Association (“ALTA”) Owner's and Loan Policies are issued in New York.

FORM USUALLY REQUIRED BY LENDER

Available endorsements of not include: New York Endorsement: Every ALTA policy issued in New York State includes a Standard New York Endorsement. The ALTA 2021 Policy provides insurance to cover intervening liens or encumbrances when the recording date of the instrument creating the insured interest is later than the policy (known as “Gap Insurance”). However, real estate taxes, water charges, and sewer rents are specifically excluded from any Gap Insurance coverage. The Standard New York Endorsement modifies this Policy exclusion, and also adds an Exclusion from Coverage, which reads as follows: “8. Any consumer protection law including, without limitation, New York Banking Law &sect;&sect; 6-l (“High-Cost Home Loans”) and 6-m (“Subprime Home Loans”) relating to a mortgage on Land improved or to be improved by a structure or structures intended principally for occupancy by one-to-four families.” Waiver of Arbitration Endorsement:&nbsp; There has been an increased trend towards nonjudicial means of settling disputes. The ALTA loan policy arbitration provisions are triggered either by the title company or by the insured when the amount of insurance is $2,000,000 or less. If the amount of insurance is more than $2,000,000, arbitration may be required only when agreed to by both the title company and the insured. The endorsement typically utilized in New York is the TIRSA Waiver of Arbitration Endorsement, which deletes the arbitration provision of the ALTA policy form (&sect; 13). Environmental Protection Lien Endorsement 8.1: Insures the lender against loss or damage sustained by reason of lack of priority of the lien of the insured mortgage and against any recorded environmental protection lien in effect as of the date of the policy. Variable Rate Mortgage Endorsement: Insures the lender of the insured mortgage against loss or damage sustained by reason of: <ul>
 <li>The invalidity or unenforceability of the lien of the insured mortgage resulting from the provisions therein that provide for changes in the rate of interest.</li>
 <li>Loss of priority of the lien of the insured mortgage as security for the unpaid principal balance of the loan, together with interest as changed in accordance with the provisions of the insured mortgage, which loss of priority is caused by changes in the rate of interest.</li>
</ul> Mortgage Tax Endorsement: Insures the lender against loss or damage sustained by reason of the non-payment of any mortgage recording tax required to be paid at closing. First Loss Endorsement: When losses on a multi-site policy exceed 10% of the insurance amount, the insurer becomes liable to pay on the policy without requiring acceleration of the indebtedness or foreclosure against all of the secured properties prior to payment. Swap Agreement Endorsement: Insures the validity, enforceability, and priority of additional interest under an Interest Rate Exchange Agreement secured by the insured mortgage. “Zoning” Endorsement: Is not available in New York. A New York City Development Rights Endorsement may be issued to insure the transfer of development rights in the City of New York within a merged zoning lot. &nbsp;

New York

Mortgage Law Summary

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Mortgage Law Summary for New York

New York

Mortgage Law Summary

Continue reading theMortgage Law Summary for New York

Continue reading the
Mortgage Law Summary for New York