2014 New York Laws
BNK - Banking
Article 12-D - (589 - 599) LICENSED MORTGAGE BANKERS
595-C - Regulation of dealings of mortgage brokers and home improvement contractors.

   595-c.  Regulation  of  dealings  of  mortgage  brokers  and  home
  improvement contractors. 1.  No  home  improvement  contractor  nor  any
  agents  or salespersons thereof shall represent, act as an agent for, or
  advertise, promote or arrange for the services of a mortgage  broker  or
  its  affiliate  while  soliciting home improvement contracts nor receive
  anything of value from a  mortgage  broker  or  its  affiliate  for  the
  referral  of  a  borrower  to  a  mortgage  broker.  The staff of a home
  improvement contractor shall not act on behalf of a mortgage  broker  in
  any transaction.
2.  Where  a  mortgage  broker  has  solicited,  processed,  placed or
  negotiated a mortgage loan, a home improvement contractor shall  not  be
  paid  directly  but  instead  may receive payment from the proceeds of a
  home improvement loan payable solely to the borrower or, at the election
  of the borrower, through an independent  third  party  escrow  agent  in
  accordance  with  the terms established in a written agreement signed by
  the borrower, the lender and the contractor  prior  to  disbursement.  A
  mortgage  broker  shall  not  offer  a  homeowner  different  loan terms
  contingent on the homeowner executing an agreement for  payment  through
  an  independent  third party as described in the preceding sentence. Any
  such agreement shall contain a clear and conspicuous disclosure: YOU ARE
  NOT REQUIRED TO EXECUTE THIS AGREEMENT. YOU MAY INSTEAD RECEIVE  PAYMENT
  DIRECTLY. (NAME OF MORTGAGE BROKER) MAY NOT OFFER YOU DIFFERENT TERMS ON
  YOUR  LOAN  TO  SIGN  THIS AGREEMENT. The provisions of this subdivision
  shall not apply to a  home  improvement  loan  insured  by  the  federal
  housing administration under section 203(k) of the National Housing Act,
  12   U.S.C.   1709(k),   or  to  amounts  added  to  a  federal  housing
  administration insured mortgage under  the  energy  efficiency  mortgage
  program  originally  established  under section 106 of the Energy Policy
  Act of 1992, as from time to time amended.
3. A mortgage broker shall not permit a home improvement contractor to
  be a cosigner or to act as a guarantor for  a  mortgage  loan  for  home
  improvement.
4.  For  the  purpose  of this section, "home improvement contractor",
  means,  with  respect  to  any  home  improvement,  a  person,  firm  or
  corporation  which  owns  or operates a home improvement business or who
  undertakes,  offers  to  undertake  or  agrees  to  perform   any   home
  improvement  for  a  fee  and  for  whom  the total price for all labor,
  materials and other items is  equal  to  or  greater  than  two  hundred
  dollars.  Home  improvement  contractor does not include a person, firm,
  corporation, landlord, cooperative  corporation,  condominium  board  of
  managers,  joint tenant or co-tenant that owns, in whole or in part, the
  property to be improved.
5. This section shall not annul, alter, affect or  exempt  any  person
  subject  to the provisions of this section from complying with the laws,
  ordinances, rules or regulations of any locality or  other  governmental
  body,  relating to home improvement contracts, except to the extent that
  such laws, ordinances, rules or regulations are  inconsistent  with  any
  provision  of  this  section,  but  no  such  law,  ordinance,  rule  or
  regulation shall be  considered  inconsistent,  if  it  affords  greater
  protection to the homeowner from persons subject to this section.