senate Bill S1078A

2011-2012 Legislative Session

Provides that a lender may receive not more than 20% of the future appreciation of property secured by a reverse mortgage granted to a person 60 years old or older

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Archive: Last Bill Status - In Committee


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor

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Actions

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Assembly Actions - Lowercase
Senate Actions - UPPERCASE
Apr 25, 2012 print number 1078a
amend and recommit to finance
Jan 04, 2012 referred to finance
Jan 05, 2011 referred to finance

Bill Amendments

Original
A (Active)
Original
A (Active)

Co-Sponsors

S1078 - Bill Details

See Assembly Version of this Bill:
A7096A
Current Committee:
Law Section:
Real Property Law
Laws Affected:
Amd §280, RP L
Versions Introduced in 2009-2010 Legislative Session:
S1339, A6763

S1078 - Bill Texts

view summary

Provides that a lender providing a reverse mortgage to a person who is 60 years of age or older may receive not more than 20% of the future appreciation of property secured by the mortgage as consideration for providing such reverse mortgage.

view sponsor memo
BILL NUMBER:S1078

TITLE OF BILL:
An act
to amend the social services law, in relation to
foster home decertification, application for
recertification, authorization for non-renewal,
notice of removal of a child, and other
required notices

PURPOSE:
To protect foster children from being placed in a home which has
previously been found to be unsuitable for providing care.

SUMMARY OF PROVISIONS:
Section 1 and 2 amend sections 376 and 377 of the Social Services Law,
by requiring that when an agency or local social services commissioner
is screening a prospective foster parent to be certified or licensed,
the agency or local commissioner must inquire with OCFS whether the
applicant has ever been a foster parent before, and, if so, whether the
certificate or license was revoked, not renewed, or a child was removed
from the home. If any of these instances have occurred, the agency or
commissioner must evaluate the circumstances and the reason(s) for such
action, to determine whether a certificate should be issued and the home
reopened.

Section 3 amends section 379 of the Social Services law, by adding
non-renewal of certificates and licenses and removal of a child, as
instances for notification to OCFS.

EXISTING LAW:
Currently, under section 379 of the Social Service Law, the only
requirement to notify OCFS is when a certification or license is
revoked. The law does not require that OCFS be informed as to the
reason(s) why the certification or license was revoked. There is no
statutory requirement for agencies or local social services
commissioners to make an inquiry to OCFS regarding an applicant's prior
history as a foster parent, before issuing a new certificate or license.

JUSTIFICATION:
When a child enters fostercare, the state assumes the responsibility of
providing a safe and secure environment for the child. However, this is
not always the case. According to agency reports and hearing testimony,
there continues to be instances where children are further abused or
even killed by their foster parents.

State statute and regulations currently set screening requirements for
prospective foster parents, including a check against the Statewide
Central Registry of Child Abuse and Maltreatment (The Child Abuse
Hotline), which houses data on reports of abuse and maltreatment against
individuals, including foster parents. However, such a check will only
provide information for reported and investigated cases.

In some cases, when a foster parent is suspected of not providing a safe
and secure environment, the caseworker will remove the child or children
from the home, but will not revoke the certificate or license, or report


the foster parent to the Child Abuse Hotline. Rather, the home remains
open with no children placed there by the agency. Then, when the home is
up for annual renewal, the agency simply does not renew their
certification.

In such cases, the foster parent may simply apply to another agency to
take foster children. Without a formal mechanism in place to check on
the prior history of the applicant and to follow up with any previous
agencies, the new agency could certify the applicant without ever
knowing about prior problems, and as a result, place more children in
jeopardy.

OCFS does currently have a mechanism for checking information on
prospective foster parents. OCFS' computerized foster parent registry is
intended to house information on all current and former foster parents.
Internal policies direct caseworkers to check the registry before a new
foster parent can be certified and added to the system. However, there
is no formal guidance as to how to evaluate any problems. Further, the
system contains limited information on the reason(s) a home was closed
or a child removed.

This bill would address these gaps by requiring that OCFS maintain a
history of removals, revocations, and non-renewals of certificates and
licenses, including the reason for such actions. It further directs OCFS
to establish regulations to help agencies and local social service
commissioners evaluate the circumstances around such actions, and decide
whether to reopen the home. Similar regulations and procedures already
exist for evaluating indicated reports from the Child Abuse Hotline and
instances where applicants have a criminal history.

LEGISLATIVE HISTORY:
2009/10: S.1078 - Died in Codes
2008: S.1500 - Referred to Social Services, Children & Families
2007/08: S.1500 - Referred to Social Services, Children & Families
2006: S.2331/A.4373 - Passed Assembly
2003/04: S.4803/A.4530 - Passed Assembly
2001-02: A.6761-A - Passed Assembly
1999-00: A.5591 - Passed Assembly

FISCAL IMPLICATIONS:
None.

EFFECTIVE DATE:
This act shall take effect on 180th day after it shall become law,
provided however, that effective immediately, the addition, amendment
and/or repeal of any rules or regulations necessary for the
implementation of the forgoing sections of this act on its effective
date are authorized and directed to be made and completed on or before
such effective date.

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                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  1078

                       2011-2012 Regular Sessions

                            I N  S E N A T E

                             January 5, 2011
                               ___________

Introduced  by  Sens. MARTINS, SKELOS -- read twice and ordered printed,
  and when printed to be committed to the Committee on Finance

AN ACT to amend the real property law, in relation to  reverse  mortgage
  loans for persons sixty years of age or older

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Subdivision 2 of section 280 of the real  property  law  is
amended by adding a new paragraph (d-1) to read as follows:
  (D-1)  SUBJECT TO SUCH RULES OR REGULATIONS AS THE BANKING BOARD SHALL
ADOPT, THE AUTHORIZED LENDER, AT ITS OPTION, MAY RECEIVE  NO  MORE  THAN
TWENTY  PERCENT  OF THE FUTURE APPRECIATION OF THE PROPERTY SECURING THE
REVERSE MORTGAGE LOAN AS FULL OR PARTIAL CONSIDERATION FOR THE MAKING OF
A REVERSE MORTGAGE LOAN; PROVIDED, HOWEVER, THAT  SUCH  FUTURE  APPRECI-
ATION  SHALL  BE  LIMITED  BY  SUCH RULES AND REGULATIONS AS THE BANKING
BOARD MAY ADOPT OR THE AUTHORIZED LENDER MAY  CHARGE  A  FIXED  RATE  OF
INTEREST ON THE OUTSTANDING BALANCE OF MONIES ADVANCED UNDER THE REVERSE
MORTGAGE  AGREEMENT  OR  ANY COMBINATION THEREOF.  ANY SUCH APPRECIATION
SHALL NOT BE CONSIDERED INTEREST FOR THE PURPOSES OF ANY LAW  REGULATING
THE  MAXIMUM  RATE  OF  INTEREST WHICH MAY BE CHARGED, TAKEN OR RECEIVED
INCLUDING SECTIONS 190.40 AND 190.42 OF THE PENAL LAW; AND
  S 2. This act shall take effect on the one hundred eightieth day after
it shall have become a law.




 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD06198-01-1

Co-Sponsors

S1078A (ACTIVE) - Bill Details

See Assembly Version of this Bill:
A7096A
Current Committee:
Law Section:
Real Property Law
Laws Affected:
Amd §280, RP L
Versions Introduced in 2009-2010 Legislative Session:
S1339, A6763

S1078A (ACTIVE) - Bill Texts

view summary

Provides that a lender providing a reverse mortgage to a person who is 60 years of age or older may receive not more than 20% of the future appreciation of property secured by the mortgage as consideration for providing such reverse mortgage.

view sponsor memo
BILL NUMBER:S1078A

TITLE OF BILL:

An act to amend the real property law, in relation to reverse mortgage
loans for persons sixty years of age or older

PURPOSE:

This bill will limit shared appreciation in revenue mortgage.

SUMMARY OF PROVISIONS:

This bill would amend the real property law to limit the shared appreci-
ation any authorized lender may receive no more than 20 per cent of the
appreciation during the term of the mortgage.

JUSTIFICATION:

In 1994, the Real property Law was amended to formalize the reverse
mortgage law in the state of New York. (Reverse mortgage allows senior
citizens to take equity out of their homes while they are living there
through equal installments, a line of credit or a lump sum).

Those mortgages are now being satisfied either by the mortgagor paying
off the mortgage, selling the property themselves or through their
estate.

Due to fluctuating market conditions and one side contacts, the Legisla-
ture has learned that certain mortgage lenders have, however, been
misusing this valuable financial instrument to exact enormous unmerited
profits. For example, when one individual mortgagor received a lump sum
payment of $114,000, and the mortgagor had to sell the property just
seven years later, the authorized lender issued a payout letter of
$451,000. This included $113,000 in compounded interest and $223,000 of
shared appreciation at the rate of 50%. with the real estate market
experiencing historic fluctuations, this problem is becoming ever more
of an issue.

This bill would attempt to remedy this usurious gouging by the author-
ized lender by reducing the shared appreciation from 50% to 20%. This
would accordingly be a much more equitable distribution of the shared
appreciation.

LEGISLATIVE HISTORY:
2008: S.642 - Passed Senate 61-0

FISCAL IMPLICATIONS:

This bill would increase revenue to state and local governments by
encouraging the issuance of reverse mortgages with fair returns and the
marketability and sale of real property.

EFFECTIVE DATE:
This bill would take effect One hundred eightieth day after it shall
have become a law.

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                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                 1078--A

                       2011-2012 Regular Sessions

                            I N  S E N A T E

                             January 5, 2011
                               ___________

Introduced  by  Sens. MARTINS, SKELOS -- read twice and ordered printed,
  and when printed to be committed to the Committee on Finance -- recom-
  mitted to the Committee on Finance in accordance with Senate  Rule  6,
  sec.  8  --  committee  discharged, bill amended, ordered reprinted as
  amended and recommitted to said committee

AN ACT to amend the real property law, in relation to  reverse  mortgage
  loans for persons sixty years of age or older

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Subdivision 2 of section 280 of the real  property  law  is
amended by adding a new paragraph (d-1) to read as follows:
  (D-1)  SUCH  RULES  OR  REGULATIONS AS THE SUPERINTENDENT OF FINANCIAL
SERVICES SHALL ADOPT, THE AUTHORIZED LENDER, AT ITS OPTION, MAY  RECEIVE
NO  MORE  THAN TWENTY PERCENT OF THE FUTURE APPRECIATION OF THE PROPERTY
SECURING THE REVERSE MORTGAGE LOAN AS FULL OR PARTIAL CONSIDERATION  FOR
THE  MAKING  OF  A  REVERSE  MORTGAGE LOAN; PROVIDED, HOWEVER, THAT SUCH
FUTURE APPRECIATION SHALL BE LIMITED BY SUCH RULES  AND  REGULATIONS  AS
THE  SUPERINTENDENT  OF  FINANCIAL  SERVICES MAY ADOPT OR THE AUTHORIZED
LENDER MAY CHARGE A FIXED RATE OF INTEREST ON THE OUTSTANDING BALANCE OF
MONIES ADVANCED UNDER THE REVERSE MORTGAGE AGREEMENT OR ANY  COMBINATION
THEREOF.  ANY SUCH APPRECIATION SHALL NOT BE CONSIDERED INTEREST FOR THE
PURPOSES OF ANY LAW REGULATING THE MAXIMUM RATE OF INTEREST WHICH MAY BE
CHARGED,  TAKEN  OR RECEIVED INCLUDING SECTIONS 190.40 AND 190.42 OF THE
PENAL LAW; AND
  S 2. This act shall take effect on the one hundred eightieth day after
it shall have become a law.


 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD06198-02-2

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