S T A T E O F N E W Y O R K
________________________________________________________________________
6883
2019-2020 Regular Sessions
I N A S S E M B L Y
March 25, 2019
___________
Introduced by M. of A. BRONSON -- read once and referred to the Commit-
tee on Judiciary
AN ACT to amend the real property law, in relation to conditions on
lenders who extend reverse mortgages to persons over sixty and seventy
years old
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Paragraphs (g), (h) and (i) of subdivision 2 of section 280
of the real property law, as added by chapter 613 of the laws of 1993,
paragraph (i) as further amended by section 104 of part A of chapter 62
of the laws of 2011, are amended to read as follows:
(g) an authorized lender must deliver to the applicant, upon applica-
tion[, if available,] a PLAIN LANGUAGE statement prepared by the [local
or county] DEPARTMENT OF FINANCIAL SERVICES WHO MAY CONSULT WITH THE NEW
YORK STATE office for the aging, WHERE APPROPRIATE, on the advisability
and availability of independent counseling and information services. IN
ADDITION TO THE PLAIN LANGUAGE NOTICE, NO REVERSE MORTGAGE LOAN APPLICA-
TION SHALL BE TAKEN BY A LENDER UNLESS THE LENDER PROVIDES THE PROSPEC-
TIVE BORROWER, PRIOR TO HIS OR HER MEETING WITH A COUNSELING AGENCY ON
REVERSE MORTGAGES, WITH A REVERSE MORTGAGE WORKSHEET GUIDE TO BE
PREPARED BY THE DEPARTMENT OF FINANCIAL SERVICES WHO MAY CONSULT WITH
THE NEW YORK STATE OFFICE FOR THE AGING WHERE APPROPRIATE. Further, no
reverse mortgage commitment shall be issued by an authorized lender
until the applicant presents, in writing, a statement that the terms of
the reverse mortgage loan have been explained 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] DEPARTMENT OF FINANCIAL SERVICES or a signed affi-
davit indicating that the applicant, although made aware of the impor-
tance of counseling and its local availability through the provision of
such information by the authorized lender, chooses not to utilize any of
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD06745-01-9
A. 6883 2
the aforementioned available services. THE LOAN APPLICATION SHALL NOT
BE APPROVED UNTIL THE SIGNED REVERSE MORTGAGE WORKSHEET GUIDE IS
PROVIDED TO THE LENDER. A COPY OF THE REVERSE MORTGAGE WORKSHEET GUIDE
SHALL BE PROVIDED TO THE BORROWER THAT SHALL HAVE INFORMATION INCLUDING,
BUT NOT LIMITED TO: HOW REVERSE MORTGAGES CAN AFFECT THE BORROWER AND
THEIR HEIRS AND ESTATE; THE CONSEQUENCES OF DEFAULTING ON A REVERSE
MORTGAGE; ALTERNATIVES TO A REVERSE MORTGAGE; AND THE IMPACT ON THE
BORROWER'S ELIGIBILITY FOR GOVERNMENT ASSISTANCE PROGRAMS. The form of
such statement and affidavit shall be developed by the DEPARTMENT OF
FINANCIAL SERVICES, WHO MAY CONSULT WITH THE New York state office for
the aging WHERE APPROPRIATE; and
(h) A LENDER SHALL NOT ACCEPT A FINAL AND COMPLETE APPLICATION FOR
REVERSE MORTGAGE LOAN FROM A PROSPECTIVE APPLICANT OR ASSESS ANY FEES
UPON A PROSPECTIVE APPLICANT UNTIL A LAPSE OF SEVEN DAYS FROM THE DATE
OF COUNSELING, AS EVIDENCED BY THE COUNSELING CERTIFICATION, AND WITHOUT
FIRST RECEIVING CERTIFICATION FROM THE APPLICANT OR THE APPLICANT'S
AUTHORIZED REPRESENTATIVE THAT THE APPLICANT HAS RECEIVED COUNSELING
FROM AN AGENCY AS DESCRIBED IN PARAGRAPH (G) OF THIS SUBDIVISION OR
SEVEN DAYS FROM RECEIPT OF A SIGNED AFFIDAVIT EXPRESSLY WAIVING SUCH
COUNSELING; AND
(I) any such reverse mortgage shall expressly and conspicuously bear a
legend identifying it as such; and
[(i)] (J) subject to such rules or regulations as the superintendent
of financial services may adopt, a reverse mortgage loan shall be made
at either a fixed or variable rate of interest.
§ 2. Paragraphs (j), (k), (l) and (m) of subdivision 2 of section
280-a of the real property law, as added by chapter 613 of the laws of
1993, paragraph (l) as further amended by section 104 of part A of chap-
ter 62 of the laws of 2011, are amended to read as follows:
(j) an authorized lender must deliver to the applicant upon applica-
tion[, if available,] a PLAIN LANGUAGE statement prepared by the [local
or county] DEPARTMENT OF FINANCIAL SERVICES, WHO MAY CONSULT WITH THE
NEW YORK STATE office for the aging, WHERE APPROPRIATE, on the advis-
ability and availability of independent counseling and information
services. IN ADDITION TO THE PLAIN LANGUAGE NOTICE, NO REVERSE MORTGAGE
LOAN APPLICATION SHALL BE TAKEN BY A LENDER UNLESS THE LENDER PROVIDES
THE PROSPECTIVE BORROWER, PRIOR TO HIS OR HER MEETING WITH A COUNSELING
AGENCY ON REVERSE MORTGAGES, WITH A REVERSE MORTGAGE WORKSHEET GUIDE TO
BE PREPARED BY THE DEPARTMENT OF FINANCIAL SERVICES, WHO MAY CONSULT
WITH THE NEW YORK STATE OFFICE FOR THE AGING WHERE APPROPRIATE. Further,
no reverse mortgage commitment shall be issued by the authorized lender
until the applicant presents, in writing, a statement that the terms of
the reverse mortgage loan have been explained to them by an attorney, a
housing and urban development certified counselor or any other coun-
seling service as indicated on the statement supplied by the [county or
local office for the aging] DEPARTMENT OF FINANCIAL SERVICES or a signed
affidavit indicating that the applicant, although made aware of the
importance of counseling and its local availability through the
provision of such information by the authorized lender, chooses not to
utilize any of the aforementioned available services. THE LOAN APPLICA-
TION SHALL NOT BE APPROVED UNTIL THE SIGNED REVERSE MORTGAGE WORKSHEET
GUIDE IS PROVIDED TO THE LENDER. A COPY OF THE REVERSE MORTGAGE WORK-
SHEET GUIDE SHALL BE PROVIDED TO THE BORROWER THAT SHALL HAVE INFORMA-
TION INCLUDING, BUT NOT LIMITED TO: HOW REVERSE MORTGAGES CAN AFFECT
THE BORROWER AND THEIR HEIRS AND ESTATE, THE CONSEQUENCES OF DEFAULTING
ON A REVERSE MORTGAGE, ALTERNATIVES TO A REVERSE MORTGAGE, AND IMPACTS
A. 6883 3
ON THE BORROWER'S ELIGIBILITY FOR GOVERNMENTAL ASSISTANCE PROGRAMS. The
form of such statement and affidavit shall be developed by the DEPART-
MENT OF FINANCIAL SERVICES, WHO MAY CONSULT WITH THE New York state
office for the aging WHERE APPROPRIATE; and
(k) A LENDER SHALL NOT ACCEPT A FINAL AND COMPLETE APPLICATION FOR A
REVERSE MORTGAGE LOAN FROM A PROSPECTIVE APPLICANT OR ASSESS ANY FEES
UPON A PROSPECTIVE APPLICANT UNTIL A LAPSE OF SEVEN DAYS FROM THE DATE
OF COUNSELING, AS EVIDENCED BY THE COUNSELING CERTIFICATION, AND WITHOUT
FIRST RECEIVING CERTIFICATION FROM THE APPLICANT OR THE APPLICANT'S
AUTHORIZED REPRESENTATIVE THAT THE APPLICANT HAS RECEIVED COUNSELING
FROM AN AGENCY AS DESCRIBED IN PARAGRAPH (J) OF THIS SUBDIVISION OR
SEVEN DAYS FROM RECEIPT OF A SIGNED AFFIDAVIT EXPRESSLY WAIVING SUCH
COUNSELING; AND
(L) a reverse mortgage pursuant to this section shall expressly and
conspicuously bear a legend identifying it as such; and
[(l)] (M) subject to such rules or regulations as the superintendent
of financial services may adopt, a reverse mortgage loan shall be made
at either a fixed or variable rate of interest; and
[(m)] (N) in the event that an authorized lender or holder of the
reverse mortgage loan intends to initiate foreclosure proceedings the
mortgagor shall have the right to designate a third party who shall be
notified. In the event that the mortgagor has not designated a third
party to receive such notice of foreclosure, then the authorized lender
or the holder of said reverse mortgage 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 mortgagor.
§ 3. This act shall take effect on the one hundred twentieth day after
it shall have become a law.