BILL NUMBER: S618
SPONSOR: COMRIE
 
TITLE OF BILL:
An act to amend the banking law and the real property law, in relation
to credit line mortgages
 
PURPOSE OR GENERAL IDEA OF BILL:
This bill will ensure mortgage lenders to not revoke or otherwise block
credit lines taken out against a consumer's home equity should the value
of the home decrease subsequent to the consumer opening the credit line.
 
SUMMARY OF SPECIFIC PROVISIONS:
Section 380-g of the banking law and section 291 of the real property
law are amended to prevent lenders from revoking or otherwise blocking
access to credit lines taken out against a borrower's home equity if the
value of the home decreases subsequent to the borrower opening the cred-
it line, provided that the borrower is current on payments related to
such credit line.
 
JUSTIFICATION:
It is not uncommon for lenders who offer lines of credit based on home
equity to cancel or freeze such lines of credit when the value of the
home drops. This can occur even in instances where it is not a result of
the actual assessed value of the home.
So long as a person is current on their payments, the original agreement
should stand, as there is no better demonstration of the viability of a
borrower than their demonstrated ability to make payments. Altering of,
or freezing lines of credit for any other reason when the borrower is
current, is an unjustifiable penalty for consumers and should not be
allowed.
 
PRIOR LEGISLATIVE HISTORY:
2024: S9801 Comrie/ A6358A Weprin
 
FISCAL IMPLICATIONS:
None to the state.
 
EFFECTIVE DATE:
Immediately.

Statutes affected:
S618: 380-g banking law, 281 real property law