A 2056: Makes clarifying changes in regards to the purchase of flood insurance by mortgagors that exceeds certain limits upon a mortgagees request; amends the effectiveness thereof.

  
  STATE OF NEW YORK ________________________________________________________________________ 2056 2025-2026 Regular Sessions  IN ASSEMBLY January 14, 2025 ___________ Introduced by M. of A. HUNTER -- read once and referred to the Committee on Judiciary AN ACT to amend the real property law, in relation to prohibiting mort- gagees from requiring mortgagors of certain real property to purchase flood insurance exceeding certain limits; and to amend a chapter of the laws of 2024 amending the real property law relating to prohibit- ing mortgagees from requiring mortgagors of certain real property to purchase flood insurance exceeding certain limits, as proposed in legislative bills numbers S. 7125-A and A. 5073-A, in relation to the effectiveness thereof The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Section 283 of the real property law, as added by a chapter 2 of the laws of 2024 amending the real property law relating to prohibit- 3 ing mortgagees from requiring mortgagors of certain real property to 4 purchase flood insurance exceeding certain limits, as proposed in legis- 5 lative bills numbers S. 7125-A and A. 5073-A, is amended to read as 6 follows: 7 § 283. Limits on amount of flood insurance required by mortgagee. No 8 mortgagee shall require a mortgagor to whom the mortgagee makes, 9 increases, extends, or renews any loan or line of credit secured by 10 improved residential real property to purchase or pay for flood insur- 11 ance on such residential real property: (1) at a coverage amount that 12 exceeds the lesser of the replacement value of the residential real 13 property or the outstanding principal mortgage balance as of the begin- 14 ning of the year for which the policy shall be in effect; or (2) that 15 includes coverage for contents. In each instance where a mortgagee 16 requires a mortgagor to purchase or pay for flood insurance on such 17 residential real property, the mortgagee shall provide notice to the 18 mortgagor at the time the mortgagee is notified of the need to purchase 19 or pay for flood insurance that states the following in clear and EXPLANATION--Matter in italics (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD02840-02-5 
 A. 2056 2 1 conspicuous print: ['Please note that the] 'The flood insurance we are 2 requiring you to purchase [will only protect your creditor or lender's 3 interest in your property. The insurance] may not be sufficient to pay 4 for many needed repairs after a flood and may not compensate you for 5 your losses in the property due to the flood. If you wish to protect 6 your home or investment, you may wish to purchase more flood insurance 7 than the amount we are requiring you to buy.' 8 § 2. Section 2 of a chapter of the laws of 2024 amending the real 9 property law relating to prohibiting mortgagees from requiring mortga- 10 gors of certain real property to purchase flood insurance exceeding 11 certain limits, as proposed in legislative bills numbers S. 7125-A and 12 A. 5073-A, is amended to read as follows: 13 § 2. This act shall take effect [immediately] on the ninetieth day 14 after it shall have become a law. 15 § 3. This act shall take effect immediately; provided, however, that 16 section one of this act shall take effect on the same date and in the 17 same manner as a chapter of the laws of 2024 amending the real property 18 law relating to prohibiting mortgagees from requiring mortgagors of 19 certain real property to purchase flood insurance exceeding certain 20 limits, as proposed in legislative bills numbers S. 7125-A and A. 21 5073-A, takes effect.