Legal Question in Real Estate Law in New York

Does State Law supercede Banking Regulations?

NYS Real Property Law Section 254-d states that no mortgagor on a loan secured primarily by an interest in real property shall be charged a fee by the mortgagee because the parties have agreed the the mortgagor shall pay real property taxes directly to the taxing authority. When I challenged this law the bank stated the general regulations of the banking board part 38 sect 38.7 (a)(13) My question is this does NYS law supercede a banking regulation? I assume the bank quoted a NYS banking regulation because they operate out of NY and their headquarters are located in NYS. Thank you PJT


Asked on 10/19/03, 10:06 am

2 Answers from Attorneys
Seth Kaufman Seth M. Kaufman

Re: Does State Law supercede Banking Regulations?

Whether the lender is charging improper fees depends on the agreement, as well as on applicable laws and regulations. Please repost with sufficient details about your case. Feel free to contact me directly - I do not charge a fee for the initial consultation.

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Answered on 10/20/03, 10:33 am
Walter LeVine Walter D. LeVine, Esq.

Re: Does State Law supercede Banking Regulations?

Firdt, I presume this is the one-time fee to set you up on the computer for tax payment purposes, which is a standard fee is almost all mortgage financings where the mortgaee is paying the taxes. Since this is a federal authorized fee, it can supercede State regulations. This is not the type of fee you would be charged, like a recurring fee, and seems appropriate.

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Answered on 10/20/03, 4:36 pm


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