Recently, Proctor Financial brought to your attention legislation proposed in New York that would place restrictions on flood insurance required by mortgagees. Proctor would like to spotlight another similar proposal, NY AB 1669, that is currently with the Committee on Judiciary. The act would prohibit mortgagees from requiring mortgagors of certain pieces of real property to purchase insurance coverage exceeding the actual value of the loan. Additionally, mortgagees would be prohibited from denying a loan on the basis that the borrower declined to purchase flood insurance coverage in excess of an amount equal to the outstanding principal balance of the loan or the maximum limit of coverage available under the national flood insurance act, whichever is less. The penalty imposed for violating the bill would be a fine of up to $10,000 for the first violation, and up to $20,000 for any subsequent violation. If passed in its current state, these requirements would take effect immediately.
To review Proctor’s previous announcement related to flood insurance legislation in New York, please click here.
Proctor will continue to track the movement of this legislation and provide updates as needed.