Summary of A05105 - New York Sub-Prime Predatory Lending Prevention Act

• Defines sub-prime home loans based on prepayment penalties and points/fees thresholds (prepayment penalty over 30 months or exceeding 2%, or total points/fees exceeding 5% of loan amount)

• Prohibits predatory practices including loan flipping, lending without regard to repayment ability, recommending default on existing loans, and falsifying credit applications; requires lenders to verify borrower ability to repay based on documented income and debt-to-income ratios

• Imposes civil liability of actual damages plus statutory damages of $5,000 per violation or twice the points and fees/closing costs (whichever is greater), plus attorney's fees; allows loan rescission for intentional violations

• Establishes fiduciary duties for mortgage bankers and brokers requiring reasonable skill, care, good faith, and fair dealing; prohibits steering consumers to disadvantageous loan terms and restricting appraiser independence

• Requires lenders to file electronic reports with the Department detailing loan agreements, defaults, and foreclosures; mandates disclosure of annual percentage rate, payment amounts, and comparative data at least three business days before closing