The New York State Senate

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

                                  5821

                       2017-2018 Regular Sessions

                          I N  A S S E M B L Y

                            February 16, 2017
                               ___________

Introduced  by  M.  of  A.  WEINSTEIN  --  read once and referred to the
  Committee on Judiciary

AN ACT to amend the real property law, in relation to the regulation  of
  default  and foreclosure of reverse mortgages issued under the federal
  home equity conversion mortgage for seniors program

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

  Section  1.  The  real property law is amended by adding a new section
280-d to read as follows:
  § 280-D. FEDERAL HOME EQUITY CONVERSION MORTGAGE DEFAULT AND  FORECLO-
SURE  REGULATION.  1.  FOR  THE  PURPOSES OF THIS SECTION, THE FOLLOWING
TERMS SHALL HAVE THE FOLLOWING MEANINGS:
  (A) REVERSE MORTGAGE LOAN. A  REVERSE  MORTGAGE  LOAN  AS  DEFINED  IN
SECTION  TWO  HUNDRED  EIGHTY  OF  THIS ARTICLE, WHICH IS ISSUED IN THIS
STATE PURSUANT TO  THE  HOME  EQUITY  CONVERSION  MORTGAGE  FOR  SENIORS
PROGRAM OPERATED BY THE FEDERAL DEPARTMENT OF HOUSING AND URBAN DEVELOP-
MENT.
  (B)  AUTHORIZED LENDER. AN AUTHORIZED LENDER AS DEFINED IN SECTION TWO
HUNDRED EIGHTY OF THIS  ARTICLE  AUTHORIZED  TO  MAKE  REVERSE  MORTGAGE
LOANS, AS DEFINED IN THIS SECTION.
  (C)  DEPARTMENT.  THE  DEPARTMENT  OF  FINANCIAL  SERVICES ESTABLISHED
PURSUANT TO SECTION ONE HUNDRED TWO OF THE FINANCIAL SERVICES LAW.
  2. IN THE EVENT OF A DEFAULT OR FORECLOSURE UPON  A  REVERSE  MORTGAGE
LOAN,  THE  AUTHORIZED  LENDER, UPON THE COMMENCEMENT OF THE FORECLOSURE
PROCEEDING, SHALL TRANSMIT TO THE  DEPARTMENT  PROOF  THAT  THE  FEDERAL
DEPARTMENT  OF  HOUSING AND URBAN DEVELOPMENT HAS GRANTED PRIOR APPROVAL
TO ACCELERATE THE LOAN, PROOF OF THE DEFAULT NOTICE TO THE MORTGAGOR AND
ANY SUCH INFORMATION RELATING TO THE LOANS  AND  THE  MORTGAGOR  AS  THE
DEPARTMENT  SHALL DETERMINE TO BE NECESSARY. UPON RECEIPT OF SUCH INFOR-
MATION, THE DEPARTMENT SHALL PROVIDE NOTICE OF AND INFORMATION  RELATING
TO  THE FORECLOSURE TO THE MORTGAGOR. SUCH NOTICE SHALL INCLUDE A NOTICE

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

                                                           LBD07842-03-7

A. 5821                             2

OF THE MORTGAGOR'S RIGHTS IN THE FORECLOSURE PROCESS AND CONTACT  INFOR-
MATION  FOR  LEGAL SERVICE ORGANIZATIONS WHICH MAY BE ABLE TO ASSIST THE
MORTGAGOR WITH THE MORTGAGE DEFAULT AND/OR FORECLOSURE.
  3.  NO  REVERSE MORTGAGE LOAN COMMITMENT SHALL BE ISSUED BY AN AUTHOR-
IZED LENDER UNLESS SUCH COMMITMENT PROVIDES IN WRITING NOTICE  THAT  THE
DEPARTMENT  WILL  BE  PROVIDED NOTICE OF ANY DEFAULT OR FORECLOSURE UPON
THE LOAN SO AS TO PROVIDE ASSISTANCE TO THE MORTGAGOR.
  4. NO AUTHORIZED LENDER SHALL MAKE AN ADVANCE PAYMENT  FOR  ANY  OBLI-
GATION ARISING FROM MORTGAGED REAL PROPERTY. FURTHERMORE, IN THE EVENT A
MORTGAGOR DEFAULTS UPON THE PAYMENT OF MORTGAGE INSURANCE PREMIUM, HOME-
OWNERS  INSURANCE  PREMIUM OR REAL PROPERTY TAX RELATED TO THE MORTGAGED
PROPERTY, THE AUTHORIZED LENDER MAY ONLY PAY THOSE PREMIUMS AND/OR TAXES
WHICH ARE IN ARREARS.
  5.  THE DEPARTMENT SHALL ISSUE REGULATIONS WHICH SHALL REQUIRE MORTGA-
GEES TO ENGAGE IN MANDATORY LOSS MITIGATION PROCEDURES TO  BE  SPECIFIED
BY  THE  DEPARTMENT.  THESE LOSS MITIGATION PROCEDURES SHALL COMPLY WITH
ANY RESTRICTIONS ON LOSS MITIGATION ISSUED BY THE FEDERAL DEPARTMENT  OF
HOUSING AND URBAN DEVELOPMENT FOR REVERSE MORTGAGES AND SHALL BE UPDATED
WHEN  NECESSARY  TO ENSURE COMPLIANCE WITH FEDERAL RULES.  THE MORTGAGEE
SHALL PROVIDE INFORMATION TO THE DEPARTMENT ABOUT LOANS  RECEIVING  SUCH
LOSS  MITIGATION ASSISTANCE.  THIS INCLUDES MAINTAINING LOAN LEVEL, LOSS
MITIGATION DATA AND PROVIDING THE DEPARTMENT WITH THE FOLLOWING INFORMA-
TION FOR LOANS ASSOCIATED WITH A REPAYMENT PLAN:
  (A) MONTHLY SURPLUS INCOME;
  (B) TERM OF REPAYMENT PLAN;
  (C) AMOUNT OF MONTHLY REPAYMENT PLAN PAYMENT;
  (D) DUE DATE OF NEXT MONTHLY PAYMENT;
  (E) WHEN A MORTGAGOR EXPERIENCES A HARDSHIP; AND
  (F) REASON FOR HARDSHIP.
  6. ANY PERSON WHO HAS BEEN INJURED BY REASON OF ANY VIOLATION OF  THIS
SECTION MAY BRING AN ACTION IN HIS OR HER OWN NAME TO RECOVER TREBLE HIS
OR HER ACTUAL DAMAGES, PLUS THE PREVAILING PLAINTIFF'S REASONABLE ATTOR-
NEY'S FEES.
  7.  THE  REQUIREMENTS OF THIS SECTION SHALL BE CONDITIONS PRECEDENT TO
COMMENCING AN ACTION TO FORECLOSE UPON A HOME EQUITY CONVERSION MORTGAGE
WHICH IS SUBJECT TO THE PROVISIONS  OF  THIS  SECTION,  AND  FAILURE  TO
COMPLY THEREWITH SHALL BE A COMPLETE DEFENSE TO A FORECLOSURE ACTION.
  § 2. This act shall take effect on the one hundred twentieth day after
it shall have become a law; provided, however, that effective immediate-
ly,  any  actions  necessary  for  the implementation of this act on its
effective date are authorized and directed to be completed on or  before
such date.