Section 256 Affidavit (Indefinite Mortgage) (New York)
About this template
The Section 256 Affidavit (Indefinite Mortgage) is a legal template specific to the state of New York. This affidavit is typically used in real estate transactions where a mortgage is being executed.
The purpose of the affidavit is to provide a detailed declaration from the mortgagee (lender) stating the reasons for not including specific escrow provisions for payment of taxes and insurance. Instead of adhering to strict escrow requirements, an indefinite mortgage allows the mortgagor (borrower) to handle these payments directly.
The Section 256 Affidavit seeks to fulfill the requirements set forth in Section 256 of the New York Real Property Law, which mandates that certain information be disclosed by the mortgagee to the mortgagor regarding the absence of an escrow account.
The affidavit typically includes important details such as the names and addresses of the parties involved, the mortgage amount, and the property description. It also outlines the specific reasons why an escrow account has not been established, such as the mortgagor's financial stability and the willingness to independently handle taxes and insurance.
By completing and signing this legal document, it ensures that a thorough and proper disclosure is made to the borrowers regarding the absence of an escrow account, protecting both parties' interests.