S T A T E   O F   N E W   Y O R K
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                                   4408
 
                        2019-2020 Regular Sessions
 
                             I N  S E N A T E
 
                              March 11, 2019
                                ___________
 
 Introduced by Sen. GOUNARDES -- read twice and ordered printed, and when
   printed to be committed to the Committee on Aging
 
 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.
              

                                                            LBD00912-01-9

 S. 4408                             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.