BILL NUMBER: S2670
SPONSOR: HOYLMAN-SIGAL
 
TITLE OF BILL:
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 prohibiting
mortgagees from requiring mortgagors of certain real property to
purchase flood insurance exceeding certain limits, as proposed in legis-
lative bills numbers S. 7125-A and A. 5073-A, in relation to the effec-
tiveness thereof
 
PURPOSE:
This is a chapter amendment that makes changes to provisions of L.2024,
c.557.
 
SUMMARY OF PROVISIONS:
This legislation amends the underlying chapter by limiting the flood
insurance a mortgagee may require a mortgagor to purchase to the lesser
of the outstanding principal mortgage balance at the beginning of the
year the policy is in effect or the replacement value of the residential
real property.
It also strikes a portion of the flood insurance notice text that refers
to the flood insurance minimum coverage only protecting the interest of
the creditor or lender and amends the underlying bills effective date to
90 days after becoming law.
 
EXISTING LAW:
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JUSTIFICATION:
Pursuant to approval memo 28 of 2024, the Executive stated that changes
were necessary to protect prospective homeowners from excessive flood
insurance purchase requirements. This legislation is a negotiated change
to the underlying chapter that addresses those concerns.
 
LEGISLATIVE HISTORY:
Chapter amendment to Chapter 557 of the Laws of 2024. S.7125-A passed
the Senate in June 2024 and A.5073-B passed the Assembly in April 2024.
 
FISCAL IMPLICATIONS:
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LOCAL FISCAL IMPLICATIONS:
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EFFECTIVE DATE:
This act shall take effect immediately; provided, however, that section
one of this act shall take effect on the same date and in the same
manner as a chapter of the laws of 2024 amending the real property law
relating to prohibiting 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, takes
effect.