May 21, 2008From: Steven Barras
Subject: Interpretation of NY Banking Law 14-b
You have asked whether the provisions of Section 14-b of the Banking Law, which relate to the payment of interest on mortgage escrow accounts, are applicable to a loan made on a property consisting of five residential apartments, one of which is occupied by the owner of the property, and a small office. The office represents a little more than five percent of the total square footage of the property. Given the facts here, it may be said that the property is used "primarily for residential purposes" and consequently, the provisions of Section 14-b would be applicable.