New York Banking Law §35 – Information Pamphlet for Residential Mortgage Applicants
On June 11, 2025, Section 35 of the New York Banking Law took effect. The new law now requires licensed lenders, mortgage bankers, and banking organizations to provide a disclosure pamphlet titled “What Mortgage Applicants Need to Know” to individuals applying for a loan secured by a mortgage upon residential real estate. The pamphlet must be provided to such individuals no later than the third business day after the date their loan application is received.
The pamphlet is available on the New York Department of Financial Services website. Applicants may be provided the pamphlet through electronic communications, including electronic mail or a hyperlink to the pamphlet posted on the Department of Financial Services website.
The term, “banking organization,” includes all banks, trust companies, private bankers, savings banks, safe deposit companies, savings and loan associations, credit unions and investment companies.” NY BNK §2. Further, the term, “mortgage banker,” refers to any person or entity who or which is licensed under Section 591 of the New York Banking Law to engage in the business of making mortgage loans in New York State. The law only applies to entities that are chartered or licensed under New York law. The law does not apply to federally chartered institutions.
While mortgage brokers are not included in the definition of a banking organization, it is highly recommended that they still comply with this new law, as it is good practice to do so.
The pamphlet discloses to applicants that they have the right to:
1. Compare and negotiate the charges of different mortgage brokers and lenders to obtain the best loan possible.
2. Ask your mortgage broker to explain such person’s responsibilities within the mortgage lending process.
3. Know how much the mortgage broker is compensated by you and the lender for your loan.
4. A clear and truthful explanation of the terms and conditions of the loan.
5. Know if the loan being offered is a fixed or adjustable rate mortgage loan, whether the loan can be transferred or refinanced, know the exact amount of your monthly loan payments, including any projected escrow payments, know the final annual percentage rate (APR) and the amount of regular payments at the loan’s closing.
6. Ask for an estimate detailing all loan and settlement charges before you agree to the loan and pay any fees, including without limitation loan application fees, title search and insurance fees, lender’s attorney fees, property appraisal charges, inspections, recording fees, late payment fees, transfer taxes, point and origination fees, escrow account balances, which services a loan applicant can shop for and which they cannot, and you are entitled to receive such estimate within three business days of applying for a loan.
7. Obtain credit counseling before closing a loan.
8. Decide whether or not to finance any portion of the points or fees.
9. Refuse to purchase credit insurance for any mortgage loan.
10. Have your property appraised by an independent licensed professional and to receive a copy of the appraisal.
11. Not be subject to deceptive marketing practices.
12. Ask for the consumer financial protection bureau’s booklet “Your home loan toolkit”.
13. Receive the following documents, and every document otherwise required to be given to you at closing under federal and New York state law:
a. Loan estimate or good faith estimate depending on the loan you are applying for.
b. Closing disclosure.
14. Know what deposits and fees are not refundable if you decide to cancel the loan agreement.
15. Receive in writing the reason for the denial or conditional approval of your loan application.
16. If refinancing, you may cancel a loan within three days of the closing by providing written notification of cancellation to the licensed lender or banking institution.
17. Receive the closing disclosure three days before the closing takes place.
18. Have any lending disputes resolved in a fair and equitable manner.
19. A credit decision that is not based upon your race, color, national origin, religion, sex, family status, sexual orientation, disability or whether any income is from public assistance.
20. File a complaint with the department or the Consumer Financial Protection Bureau if you believe that a mortgage broker or any other entity licensed by the department or the Consumer Financial Protection Bureau has violated any rules, regulations or laws which govern such person’s conduct in working with you to get or process a mortgage loan.
21. File a complaint with the New York state department of state or the Consumer Financial Protection Bureau if you believe that a real estate broker has violated any rules, regulations or laws which govern such person’s conduct in working with you to purchase a home.”
If licensed lenders, mortgage bankers, and banking organizations fail to provide loan applicants with the required disclosure pamphlet, they risk penalties from the New York Department of Financial Services and possible lawsuits by loan applicants seeking damages or loan invalidation. As indicated in the disclosure pamphlet, loan applicants have the right to file complaints with the New York Department of Financial Services or the Consumer Protection Bureau against lenders, mortgage bankers, and banking organizations that violate any rules, regulations, or laws governing their operations.
Overall, the new requirement of providing loan applicants with the disclosure pamphlet under Section 35 of the New York Banking Law will help ensure that loan applicants are aware of important details and procedures when applying for a mortgage in New York.