NY State Senate Bill 2017-S8888

Senate Bill S8888

2017-2018 Legislative Session

Relates to reverse cooperative apartment unit loans for persons seventy years of age or older

download bill text pdf

Archive: Last Bill Status - In Senate Committee Banks Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jun 01, 2018	referred to banks

2017-S8888 (ACTIVE) - Details

See Assembly Version of this Bill:: A10755
Current Committee:: Senate Banks
Law Section:: Banking Law
Laws Affected:: Add §6-n, Bank L; amd §9-611, UCC; add R3410, CPLR
Versions Introduced in 2019-2020 Legislative Session:: S3686, A2632

2017-S8888 (ACTIVE) - Summary

Relates to authorizing reverse cooperative apartment unit loans for persons seventy years of age or older; provides additional consumer protections.

2017-S8888 (ACTIVE) - Sponsor Memo

                                
 
BILL NUMBER: S8888

SPONSOR: KLEIN
 
TITLE OF BILL:  An act to amend the banking law, the uniform commer-
cial code and the civil practice law and rules, in relation to reverse
cooperative apartment unit loans

 
PURPOSE:

This bill adds consumer protections for owners of co-op apartments, who
are over the age of 70, with the ability to obtain reverse mortgages on
cooperative apartment unit loans.

 
SUMMARY OF PROVISIONS:

Section 1 amends the banking law by adding a new section, 6-n providing
definitions for reverse cooperative apartment unit loan, tenure cooper-
ative apartment unit loan, authorized lender, borrower and superinten-
dent.

Subsection 2 of section 1 states what the cooperative apartment unit

loan may be subject to.

Subsection 3 of section 1 explains what a reverse cooperative apartment
unit loan may do.

Subsection 4 of section 1 states that the superintendent shall adopt the
rules and regulations as it considers appropriate to govern reverse
cooperative apartment unit loan if it conforms to the requirements of
the section, and explains the requirements to authorize a reverse coop-
erative apartment unit loan.

Subsection 5 of section 1 clarifies the date of which the reverse coop-
erative apartment loan shall be dated as.

Subsection 6 of section 1 declares that nothing shall be construed to
limit, impair or affect the priority of any other mortgages, deeds of
trust, encumbrances or liens that was recorded or dated prior to the
effective date.

Subsection 7 of section 1 states that the sale or transfer of interest
in the cooperative apartment unit loan to another borrower will lead to
termination of the reverse loan.

Subsection 8 of section 1 explains that the apartment unit securing the
reverse loan may be reappraised by an independent appraiser at the end
of the loan term.

Subsection 9 of section 1 states that the principal, including any
accrued but unpaid interest, of a reverse cooperative apartment unit
loan agreement must be insured by the borrower.

Section 2 amends subsection (f) of section 9-611 of the uniform commer-
cial code by adding a new paragraph, 1-a, stating that the lender,
assignee or loan servicer must give notice to the borrower and sets
strict guidelines for what the notice shall look like and read as.



Section 3 amends the civil practice law and rules by adding a new rule
341 requiring a mandatory interview for foreclosure of reverse cooper-
ative apartment unit loans.

Section 4 sets effective date.

 
JUSTIFICATION:

In New York, about 75% of residential buildings are cooperatives. Many
of those living in cooperative apartment units are elderly and are of
low to middle income. The National Association of Housing Cooperatives
(NAHC) and the Council of New York Cooperatives and Condominiums (CNYC)
have spent the past sixteen years lobbying the Department of Housing and
Urban Development (HUD) for the implementation of legislation for
reverse cooperative apartment unit loans for aging individuals. The
greatest hurdle is that co-ops are not real property.

As of today, HUD continues to deny co-op owners from applying for
reverse cooperative apartment unit loans. With the correct regulations
and liability protection, the older population should be permitted to
obtain reverse instead of being forced to relocate from their homes.

With this bill, extended consumer protections will be added to the proc-
ess of acquiring a reverse cooperative apartment unit loan and will
ensure that the elderly community that so desperately wishes to stay in
their homes will be able to do so.

 
LEGISLATIVE HISTORY:

None

 
FISCAL IMPLICATIONS:

None

 
EFFECTIVE DATE:
This act shall take effect 180 days after it has become a law.

2017-S8888 (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   8888
 
                             I N  S E N A T E
 
                               June 1, 2018
                                ___________
 
 Introduced  by  Sen.  KLEIN  -- read twice and ordered printed, and when
   printed to be committed to the Committee on Banks
 
 AN ACT to amend the banking law, the uniform  commercial  code  and  the
   civil  practice  law  and  rules,  in  relation to reverse cooperative
   apartment unit loans
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  The banking law is amended by adding a new section 6-n to
 read as follows:
   § 6-N. REVERSE COOPERATIVE APARTMENT UNIT LOANS  FOR  PERSONS  SEVENTY
 YEARS  OF  AGE  OR OLDER. 1. FOR PURPOSES OF THIS SECTION, THE FOLLOWING
 TERMS SHALL HAVE THE FOLLOWING MEANINGS:
   (A) REVERSE COOPERATIVE APARTMENT UNIT LOAN. A LOAN WHICH  IS  SECURED
 BY  AN  INTEREST IN A COOPERATIVE APARTMENT THAT IS THE RESIDENCE OF THE
 BORROWER(S) THE PROCEEDS OF WHICH ARE ADVANCED TO THE BORROWER(S) DURING
 THE TERM OF THE LOAN IN EQUAL INSTALLMENTS, OR  IN  ADVANCES  THROUGH  A
 LINE  OF  CREDIT  OR  OTHERWISE,  IN LUMP SUMS, OR THROUGH A COMBINATION
 THEREOF.
   (B) TERM REVERSE COOPERATIVE APARTMENT UNIT  LOAN.  AS  USED  IN  THIS
 SECTION,  ANY  REVERSE  COOPERATIVE APARTMENT UNIT LOAN THAT HAS A FIXED
 TERM FOR PAYMENTS TO THE BORROWER(S).
   (C) TENURE COOPERATIVE APARTMENT UNIT LOAN. AS USED IN  THIS  SECTION,
 ANY  COOPERATIVE APARTMENT UNIT LOAN THAT DOES NOT HAVE A FIXED TERM FOR
 PAYMENTS TO THE BORROWER(S).
   (D) AUTHORIZED LENDER. ANY BANK, TRUST COMPANY, NATIONAL BANKING ASSO-
 CIATION, SAVINGS BANK, SAVINGS AND  LOAN  ASSOCIATION,  FEDERAL  SAVINGS
 BANK,  FEDERAL  SAVINGS  AND  LOAN ASSOCIATION, CREDIT UNION, OR FEDERAL
 CREDIT UNION OR ANY LICENSED MORTGAGE BANKER APPROVED FOR THE MAKING  OF
 REVERSE MORTGAGE LOANS BY THE SUPERINTENDENT OR ANY ENTITY EXEMPTED FROM
 LICENSING  PURSUANT  TO  SECTION FIVE HUNDRED NINETY OF THIS CHAPTER AND
 APPROVED FOR THE MAKING OF REVERSE MORTGAGE LOANS BY THE SUPERINTENDENT.
   (E) BORROWER. A TENANT IN SEVERALTY WHO IS SEVENTY  YEARS  OF  AGE  OR
 OLDER,  OR  IF  THE COOPERATIVE APARTMENT UNIT IS HELD BY TENANTS BY THE
 ENTIRETY OR BY JOINT TENANCY, THE YOUNGEST OF WHICH IS SEVENTY YEARS  OF
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets

                       [ ] is old law to be omitted.
                                                            LBD15245-03-8

 S. 8888                             2
 
 AGE  OR  OLDER  AND  WHOSE  INCOME DOES NOT EXCEED EIGHTY PERCENT OF THE
 MEDIAN INCOME OF THE COUNTY IN WHICH HE OR SHE RESIDES.
   (F) SUPERINTENDENT. THE SUPERINTENDENT ESTABLISHED PURSUANT TO SECTION
 TWO HUNDRED TWO OF THE FINANCIAL SERVICES LAW.
   2. A COOPERATIVE APARTMENT UNIT LOAN PURSUANT TO THIS SECTION SHALL BE
 SUBJECT TO THE FOLLOWING:
   (A)  THE  BORROWER SHALL BE GRANTED LIFETIME POSSESSION OF THE SUBJECT
 PREMISES OF THE COOPERATIVE APARTMENT UNIT WHICH IS THE SECURITY FOR THE
 REVERSE COOPERATIVE APARTMENT UNIT LOAN, AS LONG AS SUCH APARTMENT  UNIT
 REMAINS  THE  BORROWERS'  PRINCIPAL  RESIDENCE  AND SUBJECT TO A LIMITED
 WAIVER OF THE RIGHT OF FORECLOSURE AS DETERMINED BY THE  SUPERINTENDENT;
 AND
   (B)  THE  TERM  OF THE REVERSE COOPERATIVE APARTMENT UNIT LOAN, EXCEPT
 FOR A TENURE REVERSE COOPERATIVE APARTMENT UNIT LOAN,  SHALL  BE  FOR  A
 PERIOD OF TEN YEARS OR LESS; AND
   (C) THE LOAN TO VALUE RATIO SHALL BE DETERMINED BY THE SUPERINTENDENT;
 AND
   (D)  SUBJECT  TO SUCH RULES OR REGULATIONS AS THE SUPERINTENDENT SHALL
 ADOPT, FOR THAT PERIOD OF TIME COMMENCING AT THE END OF THE LOAN TERM OR
 TEN YEARS AFTER THE REVERSE COOPERATIVE APARTMENT UNIT  LOAN  COMMENCES,
 WHICHEVER  OCCURS  FIRST, AND ENDING AT SUCH TIME AS THE REVERSE COOPER-
 ATIVE APARTMENT UNIT LOAN IS PAID IN FULL, THE AUTHORIZED LENDER, AT ITS
 OPTION, MAY RECEIVE NO MORE THAN TWENTY PERCENT OF THE  FUTURE  APPRECI-
 ATION  OF  THE  PROPERTY SECURING THE REVERSE COOPERATIVE APARTMENT UNIT
 LOAN AS FULL OR PARTIAL CONSIDERATION FOR THE MAKING OF A REVERSE  COOP-
 ERATIVE  APARTMENT UNIT LOAN; PROVIDED, HOWEVER, THAT SUCH FUTURE APPRE-
 CIATION SHALL BE LIMITED BY SUCH RULES AND  REGULATIONS  AS  THE  SUPER-
 INTENDENT  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. SAID REVERSE  COOPERATIVE
 APARTMENT  UNIT  LOAN SHALL NOT COME DUE AND SHALL BE EXTENDED UNTIL THE
 VOLUNTARY RELINQUISHMENT BY THE BORROWERS OF POSSESSORY INTEREST IN SUCH
 COOPERATIVE APARTMENT UNIT, THE  APARTMENT  UNIT  NO  LONGER  BEING  THE
 BORROWERS'  PRINCIPAL  RESIDENCE,  THE  DEATH  OF THE BORROWERS, OR SUCH
 OTHER EVENTS AS MAY BE DETERMINED BY THE SUPERINTENDENT. ANY SUCH APPRE-
 CIATION 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
   (E) THE AUTHORIZED LENDER SHALL MAINTAIN AN  ESCROW  ACCOUNT  FOR  THE
 PURPOSES  OF PAYING REAL PROPERTY TAXES, INSURANCE PREMIUMS OF THE PROP-
 ERTY SECURING THE REVERSE COOPERATIVE APARTMENT UNIT LOAN,  OR  FOR  THE
 PAYMENT OF ANY OTHER FEES AND EXPENSES AS MAY BE PERMITTED BY THE SUPER-
 INTENDENT REGULATION; AND
   (F)  SUBJECT  TO  SUCH  RULES OR REGULATIONS AS THE SUPERINTENDENT MAY
 ADOPT, AN AUTHORIZED LENDER OR ANY SUCCESSOR OR ASSIGN OF  SUCH  AUTHOR-
 IZED  LENDER  WHICH  MAY  SUSPENDS,  CEASES  OR MAKES LATE PAYMENTS TO A
 BORROWER UNDER A  REVERSE  COOPERATIVE  APARTMENT  UNIT  LOAN  SHALL  BE
 SUBJECT TO FORFEITURE (AS LIQUIDATED DAMAGES TO SUCH BORROWER AND NOT AS
 A  PENALTY) OF TWICE THE INTEREST WHICH WOULD OTHERWISE HAVE BEEN EARNED
 DURING THE PERIOD IN WHICH PAYMENTS  WERE  SUSPENDED,  CEASED,  OR  MADE
 LATE, PROVIDED THAT SAID AUTHORIZED LENDER OR ANY SUCCESSOR OR ASSIGN OF
 SUCH AUTHORIZED LENDER SHALL HAVE THE RIGHT TO MAKE PAYMENTS PURSUANT TO
 SAID  LOAN  AGREEMENT  WITHIN  FIFTEEN DAYS OF EACH PAYMENT DATE WITHOUT
 PENALTY; AND
   (G) AN AUTHORIZED LENDER MUST DELIVER TO AN APPLICANT SUCH DISCLOSURES
 AS MAY BE REQUIRED BY THE SUPERINTENDENT WHICH SHALL DESCRIBE THE  RELE-

 S. 8888                             3

 VANT  PORTIONS  OF THE REVERSE LOAN BEING OFFERED, AND SHALL INCLUDE BUT
 NOT BE LIMITED TO THE FOLLOWING ITEMS:
   (I) EXCEPT FOR A TENURE COOPERATIVE APARTMENT UNIT LOAN, A SCHEDULE OF
 PAYMENTS TO AND FROM THE BORROWER AND THE TOTAL PAYMENTS IN DOLLARS OVER
 THE  TERM  OF  THE  REVERSE COOPERATIVE APARTMENT UNIT LOAN FOR BOTH THE
 BORROWER AND LENDER, DEPENDING ON THE TYPE OF REVERSE COOPERATIVE APART-
 MENT UNIT LOAN BEING OFFERED;
   (II) A STATEMENT PROMINENTLY DISPLAYED ADVISING APPLICANTS TO  CONSULT
 WITH  APPROPRIATE  AUTHORITIES  REGARDING TAX AND ESTATE PLANNING CONSE-
 QUENCES OF A REVERSE COOPERATIVE APARTMENT UNIT LOAN;
   (III) WHERE APPLICABLE A DESCRIPTION  OF  PREPAYMENT  AND  REFINANCING
 FEATURES;
   (IV)  TO  THE  EXTENT DETERMINABLE AT OR PRIOR TO THE INCEPTION OF THE
 REVERSE COOPERATIVE APARTMENT UNIT LOAN, THE INTEREST RATE  AND,  EXCEPT
 FOR A TENURE REVERSE COOPERATIVE APARTMENT UNIT LOAN, THE TOTAL INTEREST
 PAYABLE ON THE REVERSE COOPERATIVE APARTMENT UNIT LOAN;
   (V)  A  STATEMENT  CONCERNING  THE  COMPLIANCE  OF THE LENDER WITH THE
 CRITERIA ESTABLISHED BY THE SUPERINTENDENT  THAT  AN  AUTHORIZED  LENDER
 MUST  MEET  BEFORE  IT MAY MAKE REVERSE COOPERATIVE APARTMENT UNIT LOANS
 PURSUANT TO THIS SECTION;
   (VI) A STATEMENT SETTING FORTH THOSE EVENTS WHICH WOULD TERMINATE  THE
 REVERSE COOPERATIVE APARTMENT UNIT LOAN;
   (VII)  THE  LOAN  IS SUBJECT TO A THREE DAY RIGHT OF RESCISSION BY THE
 BORROWER; AND
   (VIII) A FINANCIAL STATEMENT SETTING FORTH AN ESTIMATE  OF  ALL  COSTS
 ASSOCIATED WITH THE LOAN; AND
   (H)  THE  OUTSTANDING  BALANCE  MAY BE PREPAID IN FULL BY THE BORROWER
 WITHOUT PENALTY AT ANY TIME DURING  THE  REVERSE  COOPERATIVE  APARTMENT
 UNIT LOAN TERM; AND
   (I)  AN  AUTHORIZED  LENDER  IS PROHIBITED FROM USING OR ATTACHING ANY
 PROPERTY OR ASSET OF THE BORROWER EXCEPT THE APARTMENT UNIT SECURING THE
 REVERSE COOPERATIVE APARTMENT UNIT LOAN IN SETTLEMENT OF A REVERSE  LOAN
 OBLIGATION; AND
   (J)  AN  AUTHORIZED LENDER MUST DELIVER TO THE APPLICANT UPON APPLICA-
 TION, A STATEMENT PREPARED BY THE LOCAL OR COUNTY OFFICE FOR  THE  AGING
 ON  THE  ADVISABILITY  AND  AVAILABILITY  OF  INDEPENDENT COUNSELING AND
 INFORMATION SERVICES. FURTHER,  NO  REVERSE  LOAN  COMMITMENT  SHALL  BE
 ISSUED  BY  THE AUTHORIZED LENDER UNTIL THE APPLICANT PRESENTS, IN WRIT-
 ING, A STATEMENT THAT THE TERMS OF  THE  REVERSE  COOPERATIVE  APARTMENT
 UNIT  LOAN  HAVE  BEEN  EXPLAINED  TO THEM BY AN ATTORNEY, A HOUSING AND
 URBAN DEVELOPMENT CERTIFIED COUNSELOR OR ANY OTHER COUNSELING SERVICE AS
 INDICATED ON THE STATEMENT SUPPLIED BY THE COUNTY OR  LOCAL  OFFICE  FOR
 THE  AGING.  THE FORM OF SUCH STATEMENT AND AFFIDAVIT SHALL BE DEVELOPED
 BY THE NEW YORK STATE OFFICE FOR THE AGING; AND
   (K) A REVERSE COOPERATIVE APARTMENT UNIT LOAN PURSUANT TO THIS SECTION
 SHALL EXPRESSLY AND CONSPICUOUSLY BEAR A LEGEND IDENTIFYING IT AS  SUCH;
 AND
   (L)  SUBJECT  TO  SUCH  RULES OR REGULATIONS AS THE SUPERINTENDENT MAY
 ADOPT, A REVERSE COOPERATIVE APARTMENT UNIT LOAN SHALL BE MADE AT EITHER
 A FIXED OR VARIABLE RATE OF INTEREST; AND
   (M) IN THE EVENT THAT AN AUTHORIZED LENDER OR HOLDER  OF  THE  REVERSE
 COOPERATIVE   APARTMENT   UNIT  LOAN  INTENDS  TO  INITIATE  FORECLOSURE
 PROCEEDINGS THE BORROWER SHALL HAVE THE RIGHT TO DESIGNATE A THIRD PARTY
 WHO SHALL BE NOTIFIED. IN THE EVENT THAT THE MORTGAGOR  HAS  NOT  DESIG-
 NATED  A  THIRD  PARTY  TO  RECEIVE SUCH NOTICE OF FORECLOSURE, THEN THE
 AUTHORIZED LENDER OR THE HOLDER OF SAID  REVERSE  COOPERATIVE  APARTMENT

 S. 8888                             4

 UNIT  LOAN  SHALL NOTIFY THE LOCAL OR COUNTY OFFICE FOR THE AGING OF ITS
 INTENT TO COMMENCE  FORECLOSURE  PROCEEDINGS.  SUCH  ENTITY  SHALL  TAKE
 APPROPRIATE ACTION TO PROTECT THE INTERESTS OF THE BORROWER; AND
   (N)  REVERSE COOPERATIVE APARTMENT UNIT LOANS SHALL BE ALSO SUBJECT TO
 ANY ELIGIBLE NON-BORROWING SPOUSE BEING PROVIDED WITH A DEFERRAL OF  THE
 DUE  AND PAYABLE STATUS OF THE LOAN UPON THE DEATH OF THE LAST SURVIVING
 BORROWER, BUT ONLY FOR A PERIOD OF TIME DURING WHICH AND SUBJECT TO  THE
 NON-BORROWING  SPOUSE  AGREEING TO EXECUTE DOCUMENTATION TO PRESERVE THE
 LENDER'S LIEN, IF REQUESTED TO DO SO; AND
   (O) A REVERSE COOPERATIVE APARTMENT UNIT LOAN SECURED BY A UNIT  IN  A
 COOPERATIVE  HOUSING  DEVELOPMENT  SHALL  ALSO  BE  SUBJECT TO THE PRIOR
 APPROVAL BY THE COOPERATIVE HOUSING ASSOCIATION'S BOARD OF DIRECTORS.
   3. A REVERSE COOPERATIVE APARTMENT UNIT LOAN PURSUANT TO THIS  SECTION
 MAY:
   (A)  PROVIDE  THAT  AN  AUTHORIZED LENDER MAY, CONSISTENT WITH FEDERAL
 LAWS AND REGULATIONS, INCLUDE A DUE-ON-SALE CLAUSE IN ITS REVERSE  COOP-
 ERATIVE  APARTMENT  UNIT  LOAN  AGREEMENT AND AT ITS OPTION EXERCISE AND
 ENFORCE SUCH CLAUSE IN ACCORDANCE WITH ITS TERMS; AND
   (B) PROVIDE THAT THE  BORROWER'S  CLOSING  COSTS,  INCLUDING  BUT  NOT
 LIMITED  TO LOAN OR COMMITMENT FEES IF ANY, INSURANCE PREMIUMS, REPAIRS,
 LEGAL FEES, THE COSTS OF ANNUITIES, THE COSTS OF THIRD PARTY COUNSELING,
 THE COSTS OF EXISTING MORTGAGES OR LIENS, AND OTHER APPROPRIATE COSTS BE
 INCLUDED IN THE PRINCIPAL OF THE REVERSE COOPERATIVE APARTMENT UNIT LOAN
 AND DISBURSED OUT OF THE LOAN PROCEEDS AT CLOSING.
   4. THE SUPERINTENDENT SHALL ADOPT THOSE RULES  OR  REGULATIONS  AS  IT
 CONSIDERS  APPROPRIATE TO GOVERN REVERSE COOPERATIVE APARTMENT UNIT LOAN
 MADE PURSUANT TO THIS SECTION. NO  REVERSE  COOPERATIVE  APARTMENT  UNIT
 LOAN  SHALL  BE  MADE  UNLESS  IT  CONFORMS  TO THE REQUIREMENTS OF THIS
 SECTION AND SUCH RULES AND REGULATIONS AS THE SUPERINTENDENT MAY  ADOPT.
 A  REVERSE COOPERATIVE APARTMENT UNIT LOAN MAY BE MADE BY ANY AUTHORIZED
 LENDER, NATIONAL BANKING ASSOCIATION, FEDERAL SAVINGS AND  LOAN  ASSOCI-
 ATION  OR  FEDERAL  CREDIT UNION IN CONFORMITY WITH RULES OR REGULATIONS
 WHICH SHALL INCLUDE, BUT ARE NOT LIMITED TO:
   (A) ANY LIMITATIONS ON THE TAKING OF A PERCENTAGE OF THE FUTURE APPRE-
 CIATION OF THE UNIT SECURING THE REVERSE COOPERATIVE APARTMENT UNIT LOAN
 AS CONSIDERATION FOR MAKING THE REVERSE LOAN;
   (B) THE EXECUTION BY AN AUTHORIZED LENDER OF A LIMITED WAIVER  OF  THE
 RIGHT OF FORECLOSURE;
   (C) WITH THE EXCEPTION OF THE COUNSELING STATEMENT PREPARED BY THE NEW
 YORK STATE OFFICE FOR THE AGING PURSUANT TO PARAGRAPH (J) OF SUBDIVISION
 TWO  OF  THIS SECTION, THE FORM AND CONTENTS OF ANY DISCLOSURE STATEMENT
 THAT AUTHORIZED LENDERS MUST PROVIDE TO BORROWERS;
   (D) AN INITIAL DISTRIBUTION LIMIT OF SIXTY PERCENT OF THE PRINCIPAL IN
 THE FIRST YEAR OF THE LOAN; AND
   (E) NET PRINCIPAL LIMITS, AS ESTABLISHED BY THE SUPERINTENDENT  TAKING
 INTO CONSIDERATION THE FOLLOWING FACTORS: THE BORROWER'S AGE AT THE TIME
 OF THE LOAN; ORIGINATION COSTS; CLOSING COSTS INCLUDING, BUT NOT LIMITED
 TO MORTGAGE INSURANCE PREMIUM, TITLE INSURANCE AND HOME INSPECTION FEES;
 AND AMOUNTS SET-ASIDE FOR HOME REPAIRS THAT ARE A REQUIREMENT OF RECEIV-
 ING THE LOAN.
   5.  NOTWITHSTANDING ANY INCONSISTENT PROVISION OF LAW, THE PRIORITY OF
 THE LIEN OF A REVERSE COOPERATIVE APARTMENT  UNIT  LOAN,  INCLUDING  THE
 LIEN  FOR  ALL PRINCIPAL, INTEREST, FEES, COSTS, SHARED APPRECIATION AND
 OTHER CHARGES ASSESSED IN CONNECTION WITH THE REVERSE LOAN,  SHALL  DATE
 FROM  THE  RECORDING OF THE LOAN IRRESPECTIVE OF THE DATE OF ANY ADVANCE
 OF REVERSE LOAN PROCEEDS OR THE DATE BY WHICH AN AUTHORIZED LENDER SHALL

 S. 8888                             5
 
 BE ENTITLED TO SHARED APPRECIATION OR ACCRUED BUT UNPAID INTEREST, FEES,
 COSTS OR OTHER CHARGES.
   6.  NOTHING  IN  THIS  SECTION  SHALL BE CONSTRUED TO LIMIT, IMPAIR OR
 OTHERWISE AFFECT THE PRIORITY, UNDER APPLICABLE LAW, OF ANY OTHER  MORT-
 GAGE,  DEED  OF  TRUST,  ENCUMBRANCE OR LIEN WHICH WAS RECORDED OR FILED
 PRIOR TO THE EFFECTIVE DATE OF THIS SECTION.
   7. THE SALE OR TRANSFER OF THE INTEREST IN THE  COOPERATIVE  APARTMENT
 UNIT  SECURING  THE  REVERSE  LOAN  TO  A  PERSON OTHER THAN AN ORIGINAL
 BORROWER OR BORROWERS SHALL RESULT IN THE  TERMINATION  OF  THE  REVERSE
 LOAN.
   8.  IN  A  TERM REVERSE COOPERATIVE APARTMENT UNIT LOAN, THE APARTMENT
 UNIT SECURING THE REVERSE LOAN MAY  BE  REAPPRAISED  BY  AN  INDEPENDENT
 APPRAISER  AT  THE  END  OF  THE LOAN TERM. IF THE VALUE OF THE UNIT HAS
 APPRECIATED, THE TERM OF THE REVERSE LOAN MAY BE EXTENDED OR REFINANCED;
 HOWEVER THE TOTAL REVERSE LOAN AMOUNT MAY NOT EXCEED SUCH AMOUNT OR LOAN
 TO VALUE RATIO AS MAY BE DETERMINED BY THE SUPERINTENDENT. THE REFINANC-
 ING OF THE REVERSE COOPERATIVE APARTMENT UNIT LOAN SHALL BE PROVIDED  BY
 THE ORIGINAL AUTHORIZED LENDER OR BY ANY OTHER AUTHORIZED LENDER.
   9.  THE  PRINCIPAL,  INCLUDING  ANY  ACCRUED BUT UNPAID INTEREST, OF A
 REVERSE COOPERATIVE APARTMENT UNIT LOAN AGREEMENT ENTERED INTO  PURSUANT
 TO  THIS  SECTION  MUST BE INSURED BY THE BORROWER. IF SUCH INSURANCE IS
 PURCHASED FROM OR OTHERWISE PROVIDED BY ANY AGENCY OF THE STATE  OF  NEW
 YORK,  THE  BORROWER  SHALL BE GRANTED THE RIGHT, FOR A TERM COOPERATIVE
 APARTMENT UNIT LOAN, TO REFINANCE  OR  EXTEND  THE  REVERSE  COOPERATIVE
 APARTMENT  UNIT  LOAN  AT THE END OF THE TERM, SUBJECT TO SUCH RULES AND
 REGULATIONS AS THE SUPERINTENDENT MAY ADOPT. THE AUTHORIZED LENDER SHALL
 HAVE THE OPTION TO CHOOSE BETWEEN REFINANCING OR EXTENDING  THE  REVERSE
 MORTGAGE  LOAN.  SUBJECT TO OBTAINING AN ADEQUATE INCREASE IN THE INSUR-
 ANCE AND SUBJECT TO SUCH RULES AND REGULATIONS AS THE SUPERINTENDENT MAY
 ADOPT, THE TOTAL REVERSE COOPERATIVE APARTMENT UNIT  LOAN  AMOUNT  SHALL
 NOT  EXCEED SUCH AMOUNT OR RATIO AS MAY BE DETERMINED BY THE SUPERINTEN-
 DENT. THE REFINANCING OF THE REVERSE  COOPERATIVE  APARTMENT  UNIT  LOAN
 SHALL  BE  PROVIDED  BY  THE  ORIGINAL AUTHORIZED LENDER OR BY ANY OTHER
 AUTHORIZED LENDER.
   § 2. Subsection (f) of section 9-611 of the uniform commercial code is
 amended by adding a new paragraph 1-a to read as follows:
   (1-A) NOTWITHSTANDING ANY OTHER PROVISION OF LAW,  WITH  REGARD  TO  A
 REVERSE  COOPERATIVE  APARTMENT UNIT LOAN, AT LEAST NINETY DAYS BEFORE A
 LENDER, AN ASSIGNEE OR A LOAN SERVICER COMMENCES  LEGAL  ACTION  AGAINST
 THE  BORROWER  OR  BORROWERS  AT  THE  PROPERTY  ADDRESS  AND  ANY OTHER
 ADDRESSES OF RECORD, INCLUDING REVERSE COOPERATIVE APARTMENT  UNIT  LOAN
 FORECLOSURE, SUCH LENDER, ASSIGNEE OR LOAN SERVICER SHALL GIVE NOTICE TO
 THE  BORROWER  IN  AT  LEAST  FOURTEEN-POINT TYPE EXCEPT FOR THE HEADING
 WHICH SHALL BE IN AT LEAST SIXTEEN-POINT TYPE WHICH  SHALL  INCLUDE  THE
 FOLLOWING:
       YOU COULD LOSE YOUR COOPERATIVE APARTMENT UNIT TO FORECLOSURE.
                PLEASE READ THE FOLLOWING NOTICE CAREFULLY.
 
 DATE
 BORROWER'S ADDRESS
 LOAN NUMBER:
 PROPERTY ADDRESS:
 DEAR BORROWER(S):
 
 AS OF ___________, WE AS YOUR LENDER OR SERVICER CLAIM THAT YOUR REVERSE
 COOPERATIVE  APARTMENT  UNIT LOAN IS ___ DAYS IN DEFAULT. UNDER NEW YORK

 S. 8888                             6
 
 STATE LAW, WE ARE REQUIRED TO SEND YOU THIS NOTICE TO  INFORM  YOU  THAT
 YOU MAY BE AT RISK OF LOSING YOUR HOME.
 
 WE,  THE LENDER OR SERVICER OF YOUR LOAN, ARE CLAIMING THAT YOUR REVERSE
 LOAN IS IN DEFAULT BECAUSE YOU HAVE  NOT  COMPLIED  WITH  THE  FOLLOWING
 CONDITIONS OF YOUR LOAN:
 
 _____  YOU  ARE  NOT  OCCUPYING  YOUR COOPERATIVE APARTMENT UNIT AS YOUR
 PRINCIPAL RESIDENCE
 _____ YOU DID NOT SUBMIT THE REQUIRED ANNUAL CERTIFICATE OF OCCUPANCY
 _____ THE NAMED BORROWER ON THE REVERSE LOAN HAS DIED
 _____ YOU DID NOT MAINTAIN HOMEOWNER'S INSURANCE
           {SERVICER NAME} PURCHASED HOMEOWNER'S INSURANCE FOR YOU ON THE
           FOLLOWING   DATE(S)   AND   FOR   THE    FOLLOWING    COST(S):
           ____________________________________
 _____ YOU DID NOT PAY WATER/SEWER CHARGES
           {SERVICER  NAME}  PAID  WATER/SEWER  CHARGES  FOR  YOU  ON THE
           FOLLOWING   DATE(S)   AND   FOR   THE    FOLLOWING    COST(S):
           ________________________
 _____ YOU DID NOT MAKE REQUIRED REPAIRS TO YOUR UNIT
 
 IF THE CLAIM IS BASED ON YOUR FAILURE TO PAY PROPERTY OR WATER AND SEWER
 CHARGES  OR MAINTAIN HOMEOWNER'S INSURANCE, YOU CAN CURE THIS DEFAULT BY
 MAKING THE PAYMENT OF $____________ FOR THE ADVANCEMENTS WE MADE TOWARDS
 THESE PAYMENTS ON YOUR BEHALF.

 YOU HAVE THE RIGHT TO DISPUTE THE CLAIMS LISTED ABOVE BY CONTACTING  US,
 BY  CALLING  ___________ OR SENDING A LETTER TO __________________. THIS
 MAY INCLUDE PROOF OF PAYMENTS MADE FOR WATER  AND  SEWER  CHARGES  OR  A
 CURRENT DECLARATION PAGE FROM YOUR INSURANCE COMPANY, OR ANY OTHER PROOF
 TO DISPUTE THE SERVICER'S CLAIM.
 
 IF  YOU  ARE IN DEFAULT FOR FAILURE TO PAY PROPERTY CHARGES (HOMEOWNER'S
 INSURANCE AND/OR WATER/SEWER CHARGES) YOU MAY QUALIFY FOR A GRANT, LOAN,
 OR RE-PAYMENT PLAN TO CURE THE DEFAULT BALANCE OWED.
 
 IF YOU ARE IN DEFAULT DUE TO THE  DEATH  OF  YOUR  SPOUSE,  YOU  MAY  BE
 CONSIDERED AN ELIGIBLE "NON-BORROWING SPOUSE" WHICH ALLOWS YOU TO REMAIN
 IN YOUR HOME FOR THE REST OF YOUR LIFE.

 IF YOU ARE OVER THE AGE OF 80 AND HAVE A LONG TERM ILLNESS, YOU MAY ALSO
 QUALIFY  FOR THE "AT-RISK EXTENSION," WHICH ALLOWS YOU TO REMAIN IN YOUR
 UNIT FOR ONE ADDITIONAL YEAR AND REQUIRES AN ANNUAL RE-CERTIFICATION.
 
 IF YOU ARE IN DEFAULT BECAUSE THE NAMED BORROWER ON THE REVERSE LOAN HAS
 DIED AND YOU ARE THE LAWFUL HEIR TO THE PROPERTY, YOU  MAY  BE  ABLE  TO
 KEEP  THE  PROPERTY BY PAYING EITHER THE FULL LOAN BALANCE OR 95 PERCENT
 OF THE UNIT'S APPRAISED VALUE, WHICHEVER IS LESS.
 
 ATTACHED TO THIS NOTICE IS A LIST OF GOVERNMENT-APPROVED  HOUSING  COUN-
 SELING AGENCIES AND LEGAL SERVICES IN YOUR AREA WHICH PROVIDE FREE COUN-
 SELING. YOU CAN ALSO CALL THE NYS OFFICE OF THE ATTORNEY GENERAL'S HOME-
 OWNER  PROTECTION  PROGRAM  (HOPP)  TOLL-FREE  CONSUMER  HOTLINE  TO  BE
 CONNECTED  TO  FREE  HOUSING  COUNSELING  SERVICES  IN  YOUR   AREA   AT
 1-855-HOME-456    (1-855-466-3456),    OR   VISIT   THEIR   WEBSITE   AT
 HTTP://WWW.AGHOMEHELP.COM. A STATEWIDE LISTING BY COUNTY IS ALSO  AVAIL-

 S. 8888                             7
 
 ABLE   AT   HTTP://WWW.DFS.NY.GOV/CONSUMER/MORTG NYS NP COUNSELING AGEN-
 CIES.HTM.  YOU MAY ALSO CALL YOUR LOCAL DEPARTMENT OF AGING FOR A REFER-
 RAL OR CALL 311 IF YOU LIVE IN NEW YORK CITY.
 
 QUALIFIED  FREE HELP IS AVAILABLE; WATCH OUT FOR COMPANIES OR PEOPLE WHO
 CHARGE A FEE FOR THESE SERVICES.
 
 YOU MAY ALSO CONTACT US DIRECTLY AT __________ AND ASK  TO  DISCUSS  ALL
 POSSIBLE OPTIONS TO ALLOW YOU TO CURE YOUR DEFAULT AND PREVENT THE FORE-
 CLOSURE  OF  YOUR  HOME.    WHILE  WE CANNOT ENSURE THAT A RESOLUTION IS
 POSSIBLE, WE ENCOURAGE YOU TO TAKE IMMEDIATE STEPS TO TRY TO  ACHIEVE  A
 RESOLUTION. THE LONGER YOU WAIT, THE FEWER OPTIONS YOU MAY HAVE.
 
 IF  YOU  HAVE NOT TAKEN ANY ACTIONS TO RESOLVE THIS MATTER WITHIN NINETY
 DAYS FROM THE DATE THIS NOTICE WAS MAILED, WE MAY COMMENCE LEGAL  ACTION
 AGAINST  YOU  (OR  SOONER  IF  YOU CEASE TO LIVE IN THE DWELLING AS YOUR
 PRIMARY RESIDENCE).
 
 IF YOU NEED FURTHER INFORMATION, PLEASE CALL THE NEW YORK STATE  DEPART-
 MENT  OF FINANCIAL SERVICES' TOLL-FREE HELPLINE AT 877-226-5697 OR VISIT
 THE DEPARTMENT'S WEBSITE AT HTTP://WWW.DFS.NY.GOV.

 IMPORTANT: YOU HAVE THE RIGHT TO REMAIN IN YOUR UNIT UNTIL YOU RECEIVE A
 COURT ORDER TELLING YOU TO LEAVE THE PROPERTY. IF A  FORECLOSURE  ACTION
 IS FILED AGAINST YOU IN COURT, YOU STILL HAVE THE RIGHT TO REMAIN IN THE
 UNIT  UNTIL A COURT ORDERS YOU TO LEAVE. YOU LEGALLY REMAIN THE OWNER OF
 AND ARE RESPONSIBLE FOR THE UNIT UNTIL THE PROPERTY IS SOLD BY YOU OR BY
 ORDER OF THE COURT AT THE CONCLUSION  OF  ANY  FORECLOSURE  PROCEEDINGS.
 THIS  NOTICE IS NOT AN EVICTION NOTICE, AND A FORECLOSURE ACTION HAS NOT
 YET BEEN COMMENCED AGAINST YOU.
   § 3. The civil practice law and rules is amended by adding a new  rule
 3410 to read as follows:
   RULE  3410. MANDATORY INTERVIEW FOR FORECLOSURE OF REVERSE COOPERATIVE
 APARTMENT UNIT LOANS.  (A) IN ANY FORECLOSURE ACTION INVOLVING A REVERSE
 COOPERATIVE APARTMENT UNIT LOAN, IN WHICH THE DEFENDANT IS A RESIDENT OF
 THE PROPERTY SUBJECT TO FORECLOSURE, THE LENDER SHALL  HAVE  A  FACE-TO-
 FACE INTERVIEW WITH THE BORROWER, OR MAKE A REASONABLE EFFORT TO ARRANGE
 SUCH  A  MEETING, BEFORE THREE FULL MONTHLY INSTALLMENTS DUE ON THE LOAN
 ARE UNPAID FOR THE PURPOSE OF  HOLDING  DISCUSSIONS  PERTAINING  TO  THE
 RELATIVE  RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER LOAN DOCUMENTS. IF
 DEFAULT OCCURS IN A REPAYMENT PLAN ARRANGED OTHER THAN DURING A PERSONAL
 INTERVIEW, THE LENDER MUST HAVE A FACE-TO-FACE MEETING WITH THE  BORROW-
 ER, OR MAKE A REASONABLE ATTEMPT TO ARRANGE SUCH A MEETING WITHIN THIRTY
 DAYS  AFTER  SUCH DEFAULT AND AT LEAST THIRTY DAYS BEFORE FORECLOSURE IS
 COMMENCED.
   (B) A FACE-TO-FACE MEETING IS NOT REQUIRED IF:
   (1) THE BORROWER DOES NOT RESIDE IN THE UNIT,
   (2) THE BORROWER HAS CLEARLY INDICATED THAT HE OR SHE WILL NOT COOPER-
 ATE IN THE INTERVIEW,
   (3) A REPAYMENT PLAN CONSISTENT WITH THE BORROWER'S  CIRCUMSTANCES  IS
 ENTERED INTO TO BRING THE BORROWER'S ACCOUNT CURRENT THUS MAKING A MEET-
 ING UNNECESSARY, AND PAYMENTS THEREUNDER ARE CURRENT, OR
   (4) A REASONABLE EFFORT TO ARRANGE A MEETING IS UNSUCCESSFUL.
   (C)  A  REASONABLE  EFFORT  TO ARRANGE A FACE-TO-FACE MEETING WITH THE
 BORROWER SHALL CONSIST AT A MINIMUM OF ONE LETTER SENT TO  THE  BORROWER
 CERTIFIED  BY  THE  POSTAL  SERVICE  AS  HAVING  BEEN DISPATCHED. SUCH A

 S. 8888                             8
 
 REASONABLE EFFORT TO ARRANGE A FACE-TO-FACE MEETING SHALL  ALSO  INCLUDE
 AT  LEAST  ONE  TRIP TO SEE THE BORROWER AT THE UNIT, UNLESS IT IS KNOWN
 THAT THE MORTGAGOR IS NOT RESIDING IN THE MORTGAGED PROPERTY.  IN  ADDI-
 TION,  THE  LENDER MUST DOCUMENT THAT IT HAS MADE AT LEAST ONE TELEPHONE
 CALL TO THE BORROWER FOR THE PURPOSE OF TRYING TO ARRANGE A FACE-TO-FACE
 INTERVIEW. THE LENDER MAY APPOINT AN AGENT TO PERFORM  ITS  RESPONSIBIL-
 ITIES UNDER THIS RULE.
   § 4. This act shall take effect on the one hundred eightieth day after
 it shall have become a law.

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