New York § 281 - 281Credit line mortgage

§ 281. 281Credit 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 superintendent of financial services. 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 thirty 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.