2006 New York Code - Credit Line Mortgage

 
    § 281. Credit line mortgage. 1.  (a) For the purposes of this section,
  a "credit line mortgage" shall mean any mortgage or deed of trust, other
  than  a  mortgage  or  deed  of  trust  made pursuant to a building loan
  contract as defined in subdivision thirteen of section two of  the  lien
  law,  which  states  that  it  secures indebtedness under a note, credit
  agreement or other financing agreement that reflects the fact  that  the
  parties  reasonably  contemplate  entering  into  a  series of advances,
  payments and readvances, and that limits the  aggregate  amount  at  any
  time  outstanding to a maximum amount specified in such mortgage or deed
  of trust. For purposes of this section,  "credit  line  mortgage"  shall
  include  a  reverse  mortgage  loan  as  defined in sections two hundred
  eighty and two hundred eighty-a of  this  article  except  that  such  a
  credit  line  mortgage  of  the  reverse mortgage loan type shall not be
  subject to the twenty year limitation set forth in  subdivision  two  of
  this section.
    (b)  Payments made by an authorized lender pursuant to any credit line
  reverse mortgage made in accordance with section two hundred eighty-a of
  this article during any one year shall be  limited  to  such  amount  or
  ratio  as  may  be  determined by the banking board. In the event that a
  borrower does not take payment under such credit line during the  course
  of  any  year  then that borrower shall have the ability to increase the
  yearly payments  by  that  amount  available  but  not  borrowed  during
  previous years.
    2.  Any credit line mortgage may, and when so expressed therein, shall
  secure not only the original  indebtedness  but  also  the  indebtedness
  created  by future advances thereunder made within twenty years from the
  date of the  recording  of  such  credit  line  mortgage,  whether  such
  advances are obligatory or are to be made at the option of the lender or
  otherwise,  to  the same extent and with the same priority of lien as if
  such future advances had been made at the time such credit line mortgage
  was recorded pursuant to section two hundred ninety-one of this chapter,
  although there may have been  no  advances  made  at  the  time  of  the
  execution  and acknowledgment of such credit line mortgage, and although
  there may be no indebtedness outstanding at  the  time  any  advance  is
  made.  The  total  amount  of  indebtedness  that may be so secured by a
  credit line mortgage may increase or decrease from time to time, but the
  amount so secured at any one time shall not exceed  the  maximum  amount
  specified  in  such  credit  line mortgage, plus interest thereon at the
  rate provided therein, and plus any disbursements made  to  protect  the
  security   of   such   credit  line  mortgage,  with  interest  on  such
  disbursements at the rate provided therein.
    3. Nothing in this section shall affect the priority of a  lien  under
  article two of the lien law with respect to future advances made under a
  credit  line  mortgage after the filing of the notice of such lien under
  the lien law.
    4. This section shall apply to advances made after the effective  date
  of  this  section under a credit line mortgage, whether such credit line
  mortgage is recorded  on  or  after,  or  was  recorded  prior  to,  the
  effective date of this section.
    5.  Nothing  in  this  section  shall be construed to limit, impair or
  otherwise affect the priority under applicable law without reference  to
  this section of a mortgage, deed of trust, encumbrance or lien which was
  recorded or filed prior to the effective date of this section.