S T A T E O F N E W Y O R K
________________________________________________________________________
5822
2017-2018 Regular Sessions
I N A S S E M B L Y
February 16, 2017
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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 provision of
certain information to mortgagors 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-e to read as follows:
§ 280-E. FEDERAL HOME EQUITY CONVERSION MORTGAGE INFORMATION SUMMARY
SHEET. 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) MORTGAGOR. A MORTGAGOR AS DEFINED IN SECTION TWO HUNDRED EIGHTY OF
THIS ARTICLE.
(D) DEPARTMENT. THE DEPARTMENT OF FINANCIAL SERVICES ESTABLISHED
PURSUANT TO SECTION ONE HUNDRED TWO OF THE FINANCIAL SERVICES LAW.
2. THE DEPARTMENT SHALL ESTABLISH AND DISTRIBUTE TO AUTHORIZED LEND-
ERS, AND PERIODICALLY UPDATE, A NEW YORK STATE HOME EQUITY CONVERSION
INFORMATION SUMMARY. SUCH SUMMARY SHALL INCLUDE, BUT NOT BE LIMITED TO:
(A) NOTICE THAT REVERSE MORTGAGE LOANS ARE NOT FREE OR COST FREE, AND
SUCH LOANS HAVE ASSOCIATED COSTS THAT ARE INCLUDED IN THE FINANCING
THEREOF;
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD07905-04-7
A. 5822 2
(B) A SCHEDULE OF PAYMENTS TO BE MADE TO AND FROM THE MORTGAGOR, AND
THE TOTAL PAYMENT FOR BOTH THE MORTGAGEE AND THE AUTHORIZED LENDER OVER
THE TERM OF THE REVERSE MORTGAGE LOAN CONTINGENT UPON THE TYPE OF SUCH
LOAN BEING OFFERED;
(C) A STATEMENT ADVISING MORTGAGORS TO CONSULT WITH LICENSED PROFES-
SIONALS REGARDING THE TAX AND ESTATE PLANNING CONSEQUENCES OF REVERSE
MORTGAGE LOANS;
(D) WHERE APPLICABLE, A DESCRIPTION OF THE PREPAYMENT AND REFINANCING
PROVISIONS OF THE REVERSE MORTGAGE LOAN;
(E) AN EXPLANATION AND ITEMIZATION OF THE POTENTIAL COSTS OF REVERSE
MORTGAGE LOANS, INCLUDING THE RATE OF INTEREST AND TOTAL INTEREST PAYA-
BLE ON SUCH LOAN;
(F) A SUMMARY OF ACTIONS OR CONDITIONS THAT WILL CONSTITUTE A DEFAULT
OF THE REVERSE MORTGAGE LOAN;
(G) A SUMMARY AND EXPLANATION OF ALTERNATIVES TO ENTERING INTO A
REVERSE MORTGAGE LOAN ON THE BASIS OF ECONOMIC HARDSHIP INCLUDING, BUT
NOT LIMITED TO, DIRECT SALE OF THE RESIDENCE, SOCIAL SAFETY NET
PROGRAMS, DEBT CONSOLIDATION OR ECONOMIC COUNSELING;
(H) INFORMATION ON A MORTGAGOR'S BASIC RIGHTS IN THE FORECLOSURE PROC-
ESS;
(I) A SUMMARY OF THE REAL PROPERTY TAX EXEMPTIONS WHICH ARE AVAILABLE
TO THE MORTGAGOR IN ORDER TO REDUCE HIS OR HER COST OF LIVING;
(J) INFORMATION ABOUT NEW YORK STATE-BASED ORGANIZATIONS THAT PROVIDE
FEDERAL DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT CERTIFIED REVERSE
MORTGAGE COUNSELING;
(K) INFORMATION ON LEGAL ASSISTANCE AND ADVOCACY ORGANIZATIONS AND
SERVICES WHICH PROVIDE ASSISTANCE TO MORTGAGORS IN THE EVENT THAT
COMPLICATIONS OR ISSUES ARISE RELATING TO THE REVERSE MORTGAGE LOAN; AND
(L) SUCH OTHER INFORMATION AS THE DEPARTMENT SHALL DEEM NECESSARY TO
FULLY INFORM MORTGAGORS OF THEIR RIGHTS AND RESPONSIBILITIES UNDER A
REVERSE MORTGAGE LOAN.
3. NOT LESS THAN FIVE DAYS PRIOR TO THE CLOSING UPON A REVERSE MORT-
GAGE LOAN, THE AUTHORIZED LENDER SHALL PROVIDE THE MORTGAGOR WITH A
COMPLETED NEW YORK STATE HOME EQUITY CONVERSION INFORMATION SUMMARY IN
DUPLICATE. EACH MORTGAGOR SHALL SIGN BOTH COPIES OF SUCH SUMMARY,
ATTESTING THAT HE OR SHE HAS READ AND FULLY UNDERSTANDS THE SUMMARY. ONE
COPY THEREOF SHALL BE RETAINED BY THE AUTHORIZED LENDER AND THE OTHER
SHALL BE RETAINED BY THE MORTGAGOR'S ATTORNEY.
4. THE PROVISION OF THE INFORMATION SUMMARY ESTABLISHED BY THIS
SECTION IS INTEGRAL TO THE EXECUTION OF A REVERSE MORTGAGE LOAN, THUS IN
THE ABSENCE OF SUCH A SUMMARY THE RELATED REVERSE MORTGAGE LOAN SHALL BE
NULL AND VOID.
5. ANY PERSON WHO HAS BEEN INJURED BY REASON OF ANY VIOLATION OF THIS
SECTION OR THE RULES AND REGULATIONS RELATED THERETO MAY BRING AN ACTION
IN HIS OR HER OWN NAME TO RECOVER TREBLE HIS OR HER ACTUAL DAMAGES, PLUS
THE PREVAILING PLAINTIFF'S REASONABLE ATTORNEYS FEE.
6. THE SUPERINTENDENT OF FINANCIAL SERVICES IS AUTHORIZED TO PROMUL-
GATE ANY RULES OR REGULATIONS HE OR SHE DEEMS NECESSARY TO IMPLEMENT THE
PROVISIONS OF THIS SECTION.
§ 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.