S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   7580
 
                             I N  S E N A T E
 
                             January 28, 2020
                                ___________
 
 Introduced  by  Sen.  BIAGGI -- 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-o to
 read as follows:
   § 6-O. REVERSE COOPERATIVE APARTMENT UNIT LOANS FOR PERSONS  SIXTY-TWO
 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  SHARES  OR MEMBERSHIP IN A COOPERATIVE APARTMENT THAT IS OR INTENDED
 TO BE THE PRIMARY RESIDENCE OF THE BORROWER OR BORROWERS THE PROCEEDS OF
 WHICH ARE ADVANCED TO THE BORROWER OR BORROWERS DURING THE TERM  OF  THE
 LOAN  IN  EQUAL INSTALLMENTS, OR IN ADVANCES THROUGH A LINE OF CREDIT OR
 OTHERWISE, IN A LUMP SUM, OR THROUGH A COMBINATION  THEREOF.    INTEREST
 AND  FEES  WILL  ACCRUE DURING THE LIFE OF THE LOAN AND WILL BE ADDED TO
 THE PRINCIPAL BALANCE OF THE LOAN, BUT WILL NOT BECOME DUE  AND  PAYABLE
 UNTIL  THE    BORROWER(S)  DIES,  PERMANENTLY  VACATES  THE APARTMENT OR
 DEFAULTS ON THE TERMS OF THE LOAN, AND WILL CONTINUE TO ACCRUE UNTIL THE
 LOAN IS PAID IN FULL.
   (B) LOAN PAYOUT OPTIONS:
   (I) TERM PAYMENT OPTION. UNDER THE TERM PAYMENT OPTION, EQUAL  MONTHLY
 PAYMENTS  ARE  MADE  BY  THE  LENDER TO THE BORROWER FOR A FIXED TERM OF
 MONTHS CHOSEN BY THE BORROWER.
   (II) TENURE PAYMENT OPTION. UNDER THE  TENURE  PAYMENT  OPTION,  EQUAL
 MONTHLY  PAYMENTS ARE MADE BY THE LENDER TO THE BORROWER, UNTIL THE LOAN
 IS PREPAID IN FULL OR BECOMES DUE AND PAYABLE.
   (III) LINE OF CREDIT PAYMENT OPTION. UNDER THE LINE OF CREDIT  PAYMENT
 OPTION,  PAYMENTS ARE MADE BY THE LENDER TO THE BORROWER AT TIMES AND IN
 AMOUNTS DETERMINED BY THE BORROWER AS LONG AS THE AMOUNTS DO NOT  EXCEED
 THE MAXIMUM AMOUNT OF LOAN PROCEEDS.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
              

                       [ ] is old law to be omitted.
                                                            LBD01344-11-0

 S. 7580                             2
 
   (IV) SINGLE LUMP SUM PAYMENT OPTION. UNDER THE SINGLE LUMP SUM PAYMENT
 OPTION,  THE  BORROWER  RECEIVES AN AMOUNT FROM THE LENDER THAT DOES NOT
 EXCEED THE MAXIMUM AMOUNT OF LOAN  PROCEEDS.  SET  ASIDES  REQUIRED  FOR
 DISBURSEMENTS  SUCH  AS  LOAN  CLOSING  COSTS OR FOR MONTHLY MAINTENANCE
 FEES,  WILL  BE  DEDUCTED  FROM  THE AMOUNT OF PROCEEDS AVAILABLE TO THE
 BORROWER.
   (C) 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.
   (D) BORROWER. A TENANT IN SEVERALTY WHO IS SIXTY-TWO 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  SIXTY-TWO  YEARS
 AGE OR OLDER.
   (E)  SUPERINTENDENT.  THE SUPERINTENDENT OF FINANCIAL SERVICES OF THIS
 STATE.
   (F) DEPARTMENT. THE DEPARTMENT OF FINANCIAL SERVICES OF THIS STATE.
   (G) THIRD-PARTY CONTACT. THE LENDER MUST ASK THE BORROWER IF THEY WANT
 TO DESIGNATE A THIRD-PARTY CONTACT, SUCH AS  A  FAMILY  MEMBER,  TRUSTED
 FRIEND,  ADVISOR  OR  OTHER  PARTY  WHOM  THE  BORROWER WOULD LIKE TO BE
 CONTACTED. IT SHALL BE THE BORROWER'S DISCRETION TO CHOOSE IF THE THIRD-
 PARTY CONTACT IS TO BE CONTACTED IF (I) THE BORROWER  HAS  NOT  RETURNED
 THE  OCCUPANCY  FORM,  AND/OR (II) THE LOAN IS IN DEFAULT FOR ANY REASON
 AND THE LENDER PLANS TO PROCEED ON COLLECTING ON THE LOAN, I.E.,  INITI-
 ATING  EVICTION  OR  FORECLOSURE  AND/OR  (III)  THE  BORROWER CANNOT BE
 REACHED.
   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' PRIMARY RESIDENCE AND  THE  BORROWER  IS  NOT  IN
 DEFAULT  UNDER THE REVERSE COOPERATIVE APARTMENT UNIT LOAN. THE BORROWER
 OR BORROWERS MUST CERTIFY ANNUALLY ON EACH ANNIVERSARY OF THE LOAN, THAT
 THEY RESIDE IN THE UNIT AND THAT IT IS THEIR PRIMARY RESIDENCE;
   (B) THE LENDER SHALL ASK THE BORROWER IF THEY DESIGNATE A THIRD  PARTY
 CONTACT,  COLLECT  SUCH  INFORMATION  FROM  THE BORROWER AND UPDATE SUCH
 INFORMATION ANNUALLY ON EACH ANNIVERSARY OF THE LOAN;
   (C) 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;
   (D)  SUBJECT  TO  SUCH  RULES OR REGULATIONS AS THE SUPERINTENDENT MAY
 ADOPT, THE AUTHORIZED LENDER MAY REQUIRE A BORROWER TO ESTABLISH  A  SET
 ASIDE  ACCOUNT FOR THE PURPOSES OF PAYING PROPERTY TAXES, MAINTENANCE OR
 COOPERATIVE FEES,  INSURANCE  PREMIUMS  OF  THE  PROPERTY  SECURING  THE
 REVERSE COOPERATIVE APARTMENT UNIT LOAN, OR FOR THE PAYMENT OF ANY OTHER
 FEES AND EXPENSES;
   (E)  A  LENDER WHO FAILS TO MAKE LOAN ADVANCES AS REQUIRED IN THE LOAN
 DOCUMENTS, AND FAILS TO CURE AN ACTUAL DEFAULT AFTER NOTICE AS SPECIFIED
 IN THE LOAN DOCUMENTS, SHALL FORFEIT ANY RIGHT TO  COLLECT  INTEREST  OR
 SERVICE  CHARGES  UNDER THE CONTRACT. THE  LENDER'S RIGHT TO RECOVERY AT
 LOAN MATURITY SHALL BE LIMITED TO THE OUTSTANDING   BALANCE  AS  OF  THE
 DATE  OF  LENDER'S DEFAULT, MINUS ALL INTEREST.  HOWEVER, A LENDER SHALL

 S. 7580                             3
 
 NOT BE REQUIRED TO MAKE LOAN ADVANCES UNDER A LOAN IF THE BORROWER IS IN
 DEFAULT UNDER  THE LOAN;
   (F)  THE  OUTSTANDING  BALANCE  MAY BE PREPAID IN FULL BY THE BORROWER
 WITHOUT PENALTY AT ANY TIME DURING  THE  REVERSE  COOPERATIVE  APARTMENT
 UNIT LOAN TERM;
   (G)  AN  AUTHORIZED  LENDER  IS PROHIBITED FROM USING OR ATTACHING ANY
 PROPERTY OR ASSET OF THE BORROWER OR HEIRS OF THE  BORROWER  EXCEPT  THE
 APARTMENT  UNIT  SECURING THE REVERSE COOPERATIVE APARTMENT UNIT LOAN IN
 SETTLEMENT OF A REVERSE LOAN  OBLIGATION--THE  LOAN  IS  A  NON-RECOURSE
 LOAN;
   (H)  AN AUTHORIZED LENDER SHALL DELIVER TO THE APPLICANT UPON APPLICA-
 TION, A STATEMENT PREPARED  BY  THE  DEPARTMENT  PROVIDING  THE  CONTACT
 INFORMATION  FOR  NEW  YORK  APPROVED, OR U.S. DEPARTMENT OF HOUSING AND
 URBAN DEVELOPMENT APPROVED, REVERSE  MORTGAGE  HOUSING  COUNSELORS  WITH
 COOPERATIVE HOUSING TRAINING APPROVED BY THE DEPARTMENT WHOM THE COOPER-
 ATIVE  APARTMENT  OWNER CAN CALL FOR INDEPENDENT COUNSELING AND INFORMA-
 TION SERVICES. FURTHER, NO REVERSE LOAN COMMITMENT SHALL  BE  ISSUED  BY
 THE  AUTHORIZED  LENDER UNTIL THE APPLICANT PRESENTS, IN WRITING, A FORM
 THAT CERTIFIES THE TERMS OF THE REVERSE COOPERATIVE APARTMENT UNIT  LOAN
 HAVE  BEEN EXPLAINED TO THEM BY A NEW YORK OR U.S. DEPARTMENT OF HOUSING
 AND URBAN DEVELOPMENT APPROVED REVERSE MORTGAGE HOUSING  COUNSELOR  WITH
 COOPERATIVE  HOUSING  TRAINING  APPROVED  BY THE DEPARTMENT. THE FORM OF
 SUCH STATEMENT AND AFFIDAVIT AND COOPERATIVE HOUSING COUNSELING SERVICES
 SHALL BE APPROVED BY THE SUPERINTENDENT;
   (I) AN AUTHORIZED LENDER SHALL DELIVER TO AN  APPLICANT  SUCH  DISCLO-
 SURES  AS MAY BE REQUIRED BY THE SUPERINTENDENT WHICH SHALL DESCRIBE THE
 RELEVANT PORTIONS OF THE REVERSE LOAN BEING OFFERED, AND  SHALL  INCLUDE
 BUT NOT BE LIMITED TO THE FOLLOWING ITEMS:
   (I)  A  SCHEDULE  OF  PAYMENTS  TO AND FROM THE BORROWER AND THE TOTAL
 PAYMENTS IN DOLLARS OVER THE LIFE EXPECTANCY OF THE YOUNGEST BORROWER OF
 THE REVERSE COOPERATIVE APARTMENT UNIT LOAN FOR THE BORROWER;
   (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, AN ESTI-
 MATE OF 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 CAUSE THE LOAN
 TO BECOME DUE AND PAYABLE (OR CAUSE THE BORROWER TO DEFAULT) 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;
   (J) AN AUTHORIZED LENDER SHALL DELIVER TO EACH BORROWER AT THE TIME OF
 CLOSING OF A REVERSE COOPERATIVE UNIT LOAN TWO COPIES OF THE  BORROWER'S
 RIGHT  TO  CANCEL  AND  INSTRUCTIONS  FOR  HOW  TO CANCEL THE LOAN TO BE
 PRESCRIBED BY THE SUPERINTENDENT;

 S. 7580                             4
 
   (K) A REVERSE COOPERATIVE APARTMENT UNIT LOAN PURSUANT TO THIS SECTION
 SHALL EXPRESSLY AND CONSPICUOUSLY BEAR A LEGEND IDENTIFYING IT  AS  SUCH
 IN AT LEAST FOURTEEN-POINT FONT;
   (L)  A REVERSE COOPERATIVE APARTMENT UNIT LOAN SHALL CLEARLY SET FORTH
 THE TERMS FOR WHEN THE LOAN BECOMES DUE AND PAYABLE, INCLUDING:
   (I) REGARDLESS OF LOAN PAYOUT OPTION CHOSEN BY THE BORROWER, THE  LOAN
 NOTE  SHALL  STATE THAT THE OUTSTANDING LOAN BALANCE WILL NOT BE DUE AND
 PAYABLE IN FULL UNTIL THE LAST BORROWER DIES, OR IF A  BORROWER  CONVEYS
 ALL  OF  HIS  OR HER TITLE IN THE PROPERTY AND NO OTHER BORROWER RETAINS
 TITLE TO THE PROPERTY; AND
   (II) THE LOAN NOTE SHALL STATE THAT THE OUTSTANDING LOAN BALANCE SHALL
 BE DUE AND PAYABLE IN FULL IF ANY OF THE FOLLOWING OCCUR:
   (1) THE PROPERTY CEASES TO BE THE PRIMARY RESIDENCE OF A BORROWER  FOR
 REASONS  OTHER  THAN DEATH AND THE PROPERTY IS NOT THE PRIMARY RESIDENCE
 OF AT LEAST ONE OTHER BORROWER;
   (2) FOR A PERIOD OF LONGER THAN TWELVE CONSECUTIVE MONTHS, A  BORROWER
 FAILS  TO  OCCUPY THE PROPERTY BECAUSE OF PHYSICAL OR MENTAL ILLNESS AND
 THE PROPERTY IS NOT THE PRIMARY RESIDENCE OF AT LEAST ONE OTHER  BORROW-
 ER; OR
   (3) AN OBLIGATION OF THE BORROWER UNDER THE LOAN NOTE IS NOT MET;
   (M)  IN  THE  EVENT THAT AN AUTHORIZED LENDER OR HOLDER OF THE REVERSE
 COOPERATIVE APARTMENT UNIT LOAN DETERMINES THE LOAN IS  IN  DEFAULT  AND
 INTENDS  TO  INITIATE PROCEEDINGS PURSUANT TO THE NOTE, THE LENDER SHALL
 NOTIFY THE BORROWER'S THIRD-PARTY CONTACT. IN THE EVENT THAT THE BORROW-
 ER HAS NOT DESIGNATED A THIRD-PARTY CONTACT TO RECEIVE  SUCH  NOTICE  OF
 FORECLOSURE,  THEN  THE  AUTHORIZED LENDER OR THE HOLDER OF SAID REVERSE
 COOPERATIVE APARTMENT 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;
   (N)  A  REVERSE COOPERATIVE APARTMENT UNIT LOAN SECURED BY A UNIT IN A
 COOPERATIVE HOUSING CORPORATION SHALL  ALSO  BE  SUBJECT  TO  THE  PRIOR
 APPROVAL BY THE COOPERATIVE'S BOARD OF DIRECTORS; AND
   (O)  NO  REVERSE  COOPERATIVE  APARTMENT UNIT LOAN SHALL BE SUBJECT TO
 MANDATORY BINDING ARBITRATION.
   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 THIRD PARTY COUNSELING, THE COSTS OF PAYING OFF
 ANY 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 SUCH RULES OR REGULATIONS AS HE OR
 SHE CONSIDERS APPROPRIATE TO GOVERN A 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.
   5. NO AUTHORIZED LENDER OR ANY OTHER PARTY  OR  ENTITY  SHALL  IN  ANY
 MANNER,  IN  THE  MARKETING OR OFFERING OF REVERSE COOPERATIVE APARTMENT
 UNIT LOANS, ENGAGE IN ANY UNFAIR OR DECEPTIVE  PRACTICES  IN  CONNECTION

 S. 7580                             5
 
 WITH  THE  MARKETING  OR  OFFERING OF REVERSE COOPERATIVE APARTMENT UNIT
 LOANS, AND, ADDITIONALLY, SHALL NOT:
   (A)  USE  THE  WORDS  "PUBLIC SERVICE ANNOUNCEMENT" IN ANY COMMERCIAL,
 MAILING, ADVERTISEMENT OR WRITING RELATING THERETO;
   (B) USE THE WORDS  "GOVERNMENT  INSURED"  OR  OTHER  SIMILAR  LANGUAGE
 REPRESENTING  THAT REVERSE COOPERATIVE APARTMENT UNIT LOANS ARE INSURED,
 SUPPORTED AND SPONSORED BY ANY GOVERNMENTAL ENTITY  IN  ANY  COMMERCIAL,
 MAILING, ADVERTISEMENT OR WRITING RELATING THERETO; OR
   (C) REPRESENT THAT ANY SUCH LOAN IS OTHER THAN A COMMERCIAL PRODUCT.
   6.  (A) EVERY AUTHORIZED LENDER AND ASSIGNEE MUST OBTAIN A SURETY BOND
 IN THE AMOUNT OF ONE HUNDRED THOUSAND DOLLARS FOR THE BENEFIT OF  CLAIMS
 AGAINST  THE LENDER/ASSIGNEE FOR FAILURE TO PERFORM THEIR OBLIGATIONS TO
 THE BORROWER. THE SUPERINTENDENT WILL HOLD THE SURETY BOND. IN ADDITION,
 A LENDER OR ASSIGNEE SHALL MAINTAIN AN  IRREVOCABLE  STANDBY  LETTER  OF
 CREDIT  FROM  A  FINANCIAL INSTITUTION APPROVED BY THE SUPERINTENDENT IN
 FAVOR OF THE LENDER OR ASSIGNEE IN  AN  AMOUNT  NECESSARY  TO  FUND  ALL
 REVERSE  MORTGAGE  LOAN  REQUIREMENTS  ANTICIPATED  OVER THE NEXT TWELVE
 MONTHS FOR LOANS THEN ON THE LENDER'S BOOKS AND  THOSE  EXPECTED  TO  BE
 MADE  OVER THE NEXT TWELVE MONTHS OR THREE MILLION DOLLARS, WHICHEVER IS
 GREATER. THE INITIAL TERM OF THE LETTER OF CREDIT SHALL BE AT LEAST  TWO
 YEARS. A LENDER OR ASSIGNEE ALSO SHALL MAINTAIN A MINIMUM CAPITAL OF TEN
 MILLION  DOLLARS.  A LENDER MAY RELY UPON ITS PARENT COMPANY TO MEET THE
 MINIMUM CAPITAL REQUIREMENTS. THE REQUIREMENTS FOR A  LETTER  OF  CREDIT
 SHALL  NOT  APPLY  TO  LOANS  THAT ARE FULLY FUNDED AT CONSUMMATION. THE
 MINIMUM CAPITAL REQUIREMENTS SHALL NOT APPLY  TO  LENDERS  OR  ASSIGNEES
 THAT  SELL  LOANS IN THE SECONDARY MARKET TO A FINANCIALLY VIABLE FINAN-
 CIAL INSTITUTION, AND THE SUPERINTENDENT SHALL DEFINE  THE  REQUIREMENTS
 OF WHAT CONSTITUTES A "FINANCIALLY VIABLE FINANCIAL INSTITUTION PRIOR TO
 ANY SECONDARY MARKET SALE".
   (B)  EVERY  AUTHORIZED  LENDER  OR  ITS  AGENT SHALL PROVIDE, WITH ANY
 SOLICITATION FOR REVERSE COOPERATIVE APARTMENT UNIT LOAN PRODUCTS MAILED
 TO A PHYSICAL ADDRESS WITHIN THE STATE, SUPPLEMENTAL CONSUMER PROTECTION
 MATERIALS THE CONTENT AND FORM OF WHICH SHALL BE SPECIFIED BY THE SUPER-
 INTENDENT OR HIS OR HER DESIGNEE.
   (C) EVERY AUTHORIZED LENDER SHALL PROVIDE EACH APPLICANT OR  POTENTIAL
 APPLICANT  FOR  A REVERSE COOPERATIVE APARTMENT UNIT LOAN WITH THE TELE-
 PHONE NUMBER AND INTERNET WEBSITE ADDRESS PROVIDED BY THE DEPARTMENT FOR
 THE PURPOSES OF ACQUIRING REVERSE COOPERATIVE APARTMENT UNIT LOAN  COUN-
 SELING.
   (D)  THE  SUPERINTENDENT  IS  AUTHORIZED  TO PROMULGATE SUCH RULES AND
 REGULATIONS  AS  HE  OR  SHE  SHALL  DEEM  NECESSARY  TO  IMPLEMENT  THE
 PROVISIONS OF THIS SUBDIVISION.
   7. FOR REVERSE COOPERATIVE APARTMENT UNIT LOANS, AUTHORIZED LENDER AND
 THEIR AGENTS SHALL:
   (A)  PROVIDE  A MONTHLY ACCOUNT STATEMENT, AND FOR ALL BORROWERS WHOSE
 MAINTENANCE FEES, SPECIAL ASSESSMENTS MORTGAGE INSURANCE PAYMENTS, HOME-
 OWNERS INSURANCE PAYMENTS, OR PAYMENTS STEMMING FROM ANY OTHER  PROPERTY
 OBLIGATION OR OBLIGATIONS ARE ADMINISTERED BY THE AUTHORIZED LENDER, AND
 WHERE  THESE  PAYMENTS  ARE  DERIVED  FROM THE PROCEEDS OF THE LOAN, THE
 AUTHORIZED LENDER SHALL PROVIDE ON THE BORROWER'S ACCOUNT STATEMENT  THE
 CURRENT  BALANCE  REMAINING IN THE BORROWER'S LINE OF CREDIT OR LIFETIME
 EXPECTANCY SET ASIDE, THE PROJECTED ANNUAL  PROPERTY  CHARGES  FOR  THAT
 YEAR, AND A NOTICE WHICH READS IN AT LEAST FOURTEEN POINT TYPE:
   "YOUR  MAINTENANCE  FEES  AND  SPECIAL ASSESSMENTS ARE CURRENTLY BEING
 PAID BY THE PROCEEDS OF THIS LOAN. THE FUNDS THAT HAVE  BEEN  SET  ASIDE
 ARE  EXPECTED  TO  BE  EXHAUSTED  AFTER THE MAINTENANCE FEES AND SPECIAL

 S. 7580                             6
 
 ASSESSMENT PAYMENTS  OF  (SPECIFY  EXPECTED  MONTH  AND  YEAR).  IF  THE
 PROCEEDS  OF  THIS  LOAN  CANNOT  PAY  THE  MAINTENANCE FEES AND SPECIAL
 ASSESSMENTS, YOU MUST PAY THESE OBLIGATIONS OR YOUR COOP SHARES  MAY  BE
 LOST  TO  FORECLOSURE.  PLEASE  NOTE  THAT  MAINTENANCE FEES AND SPECIAL
 ASSESSMENTS CAN VARY SO YOU SHOULD CONTINUE TO REVIEW  THIS  NOTICE  FOR
 CHANGES."
   (B)  BY TELEPHONE AND FIRST CLASS MAIL, INFORM AND PROVIDE NOTICE TO A
 BORROWER WHEN HIS OR HER HOME EQUITY LINE OF CREDIT OR  LIFE  EXPECTANCY
 SET  ASIDE  IS  DEPLETED  TO  TWENTY  PERCENT OR LESS OF ITS VALUE. SUCH
 NOTICE SHALL INFORM THE BORROWER OF HIS OR HER OBLIGATIONS  RELATING  TO
 SUCH  REAL  PROPERTY  INCLUDING, BUT NOT LIMITED TO, MORTGAGE INSURANCE,
 HOMEOWNERS INSURANCE AND REAL PROPERTY TAXES  PREVIOUSLY  PAID  BY  SUCH
 LINE  OF  CREDIT OR LIFE EXPECTANCY SET ASIDE, AND THAT SUCH OBLIGATIONS
 MUST CONTINUE TO BE PAID WHEN THE HOME EQUITY LINE  OF  CREDIT  OR  LIFE
 EXPECTANCY  SET ASIDE IS DEPLETED. SUCH NOTICE SHALL USE PLAIN LANGUAGE,
 WRITTEN IN A CLEAR AND COHERENT MANNER USING WORDS WITH COMMON AND EVERY
 DAY  MEANINGS,  APPROPRIATELY  DIVIDED  AND  CAPTIONED  BY  ITS  VARIOUS
 SECTIONS.  IF  THE LENDER OR ITS AGENT IS UNABLE TO CONTACT THE BORROWER
 BY TELEPHONE, NOTICE MUST BE SENT TO THE THIRD-PARTY CONTACT IF  AUTHOR-
 IZED BY THE BORROWER.
   (C)  EACH  AUTHORIZED LENDER SHALL, BY TELEPHONE AND FIRST CLASS MAIL,
 INFORM AND PROVIDE NOTICE TO A BORROWER WHEN HIS OR HER HOME EQUITY LINE
 OF CREDIT OR LIFE EXPECTANCY SET ASIDE IS DEPLETED.  SUCH  NOTICE  SHALL
 INFORM  THE  BORROWER  OF HIS OR HER OBLIGATIONS RELATING TO THE COOPER-
 ATIVE APARTMENT UNIT INCLUDING, BUT NOT LIMITED TO, MORTGAGE  INSURANCE,
 HOMEOWNERS  INSURANCE  AND REAL PROPERTY TAXES, AND THAT THE HOME EQUITY
 LINE OF CREDIT OR LIFE EXPECTANCY SET ASIDE WILL  NO  LONGER  PAY  THESE
 OBLIGATIONS.  SUCH  NOTICE  SHALL USE PLAIN LANGUAGE, WRITTEN IN A CLEAR
 AND COHERENT MANNER USING WORDS WITH  COMMON  AND  EVERY  DAY  MEANINGS,
 APPROPRIATELY DIVIDED AND CAPTIONED BY ITS VARIOUS SECTIONS.
   8. IN THE EVENT THAT AN AUTHORIZED LENDER DETERMINES A REVERSE COOPER-
 ATIVE APARTMENT UNIT LOAN TO BE IN DEFAULT ON THE BASIS THAT THE COOPER-
 ATIVE APARTMENT IS NO LONGER THE PRIMARY RESIDENCE OF OR OCCUPIED BY THE
 BORROWER, IF DURING THE VERIFICATION OF THE BORROWER'S PRIMARY RESIDENCE
 AND/OR  OCCUPANCY  NO  RESPONSES  ARE  RECEIVED  IN RESPONSE TO MAILINGS
 RELATING THERETO, SUCH LENDER SHALL CAUSE A TELEPHONE CALL TO BE MADE TO
 THE BORROWER, OR IF THE BORROWER IS UNREACHABLE  BY  TELEPHONE,  TO  THE
 THIRD-PARTY  CONTACT IF DESIGNATED, AND AN IN PERSON VISIT TO BE MADE TO
 THE BORROWER AT THE COOPERATIVE  APARTMENT  TO  BE  MADE  PRIOR  TO  THE
 COMMENCEMENT  OF ANY PROCEEDING TO ENFORCE THE LENDER'S RIGHTS UNDER THE
 NOTE. DURING SUCH VISIT,  THE  AUTHORIZED  LENDER  OR  ITS  AGENT  SHALL
 PROVIDE CLEAR INFORMATION AS TO WHO THEY ARE, THAT THE VISIT PERTAINS TO
 THE  REVERSE  COOPERATIVE  APARTMENT  UNIT LOAN, THE REASON FOR THE HOME
 VISIT, AND THE TELEPHONE NUMBER TO CALL  FOR  FURTHER  INFORMATION.  THE
 AUTHORIZED  LENDER  MUST WAIT AT LEAST THIRTY DAYS FOLLOWING SUCH VISIT,
 IN ADDITION TO ANY ADDITIONAL TIME OR NOTICE REQUIREMENTS  SPECIFIED  BY
 ANY  OTHER  PROVISION  OF LAW, BEFORE INITIATING A FORECLOSURE ACTION ON
 THE BASIS THAT THE COOPERATIVE APARTMENT IS NO LONGER THE PRIMARY  RESI-
 DENCE  OF  THE  BORROWER. IF THE BORROWER CONTACTS THE AUTHORIZED LENDER
 AND PROVIDES PROOF OF RESIDENCE OR OCCUPANCY AFTER SUCH VISIT BUT BEFORE
 THE COMMENCEMENT OF A PROCEEDING TO ENFORCE THE  LENDER'S  RIGHTS  UNDER
 THE  NOTE,  THE  AUTHORIZED  LENDER SHALL BE BARRED FROM INITIATING SUCH
 ACTION.  FURTHERMORE, NO AUTHORIZED LENDER SHALL CHARGE A  BORROWER  ANY
 FEE  FOR  ANY SUCH VISIT AND INSPECTION. THIS PROHIBITION ON THE IMPOSI-
 TION OF FEES SHALL INCLUDE ANY AND  ALL  INSPECTIONS  CONDUCTED  BY  THE

 S. 7580                             7
 
 AUTHORIZED LENDER TO VERIFY THE STATUS OF THE REVERSE COOPERATIVE APART-
 MENT UNIT LOAN, OR ANY SUSPECTED OR ACTUAL DEFAULT CONDITION.
   9.  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,  AND  OTHER CHARGES
 ASSESSED IN CONNECTION WITH THE REVERSE LOAN, SHALL DATE FROM THE FILING
 OF A UCC-1 NOTICE FOR THE LOAN IRRESPECTIVE OF THE DATE OF  ANY  ADVANCE
 OF REVERSE LOAN PROCEEDS OR THE DATE BY WHICH AN AUTHORIZED LENDER SHALL
 BE  ENTITLED TO ACCRUED BUT UNPAID INTEREST, FEES, COSTS OR OTHER CHARG-
 ES.
   10. 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 FILED  PRIOR  TO  THE
 EFFECTIVE DATE OF THIS SECTION.
   11.  THE SALE OR TRANSFER OF THE INTEREST IN THE COOPERATIVE APARTMENT
 UNIT SECURING THE REVERSE COOPERATIVE APARTMENT UNIT LOAN  TO  A  PERSON
 OTHER  THAN AN ORIGINAL BORROWER OR BORROWERS SHALL RESULT IN THE TERMI-
 NATION OF THE REVERSE LOAN.
   12. ANY PERSON WHO HAS BEEN INJURED BY REASON OF ANY VIOLATION OF THIS
 SECTION OR ANY VIOLATION OF THE RULES AND REGULATIONS OF THE  DEPARTMENT
 RELATING  TO  THE  REVERSE  COOPERATIVE  APARTMENT UNIT LOAN PROGRAM 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'
 FEES.
   13. COMPLIANCE WITH THE PROVISIONS OF THIS SECTION SHALL BE CONDITIONS
 PRECEDENT TO COMMENCING AN ACTION TO FORECLOSE UPON  A  REVERSE  COOPER-
 ATIVE  APARTMENT  UNIT  LOAN  WHICH IS SUBJECT TO THE PROVISIONS OF THIS
 SECTION, AND THE FAILURE TO COMPLY THEREWITH SHALL BE A COMPLETE DEFENSE
 TO SUCH ACTION.
   § 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 FORTY-FIVE DAYS BEFORE
 A  SECURED  PARTY,  AS  DEFINED UNDER SECTION 9-102(A)(73), OR ITS AGENT
 TAKES ANY STEPS TO DISPOSE OF ITS COLLATERAL, AS PROVIDED FOR IN SECTION
 9-610, THE SECURED PARTY OR ITS AGENT SHALL GIVE NOTICE TO THE BORROWER,
 AND SEPARATE NOTICE TO THE BORROWER'S DESIGNATED THIRD-PARTY IF ONE  HAS
 BEEN  DESIGNATED  IN AT LEAST FOURTEEN-POINT TYPE EXCEPT FOR THE HEADING
 WHICH SHALL BE IN AT LEAST SIXTEEN-POINT TYPE. THE NOTICE 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) {OR HEIRS OF DEBTOR?}:
 AS  OF  ___________,  YOUR REVERSE COOPERATIVE APARTMENT UNIT LOAN IS IN
 DEFAULT. UNDER NEW YORK STATE LAW, WE ARE  REQUIRED  TO  SEND  YOU  THIS
 NOTICE TO INFORM YOU THAT YOU MAY BE AT RISK OF LOSING YOUR HOME.
 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
 PRIMARY RESIDENCE
 _____ YOU DID NOT SUBMIT THE REQUIRED ANNUAL CERTIFICATE OF OCCUPANCY
 _____ THE NAMED BORROWER ON THE REVERSE LOAN HAS DIED

 S. 7580                             8
 
 _____ YOU DID NOT PAY MAINTENANCE ON YOUR UNIT TO THE COOPERATIVE CORPO-
 RATION,  AND  {SERVICER}  PAID YOUR MAINTENANCE FOR YOU ON THE FOLLOWING
 DATE(S)  IN  THE  FOLLOWING   AMOUNT(S):________________________________
 ____________________________________
 _____ YOU DID NOT MAKE REQUIRED REPAIRS TO YOUR UNIT
 IF  THE CLAIM IS BASED ON YOUR FAILURE TO PAY MAINTENANCE TO THE COOPER-
 ATIVE CORPORATION, YOU CAN CURE THIS DEFAULT BY MAKING  THE  PAYMENT  OF
 $____________  FOR  THE  ADVANCES 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.
 OPTIONS  MAY  BE  AVAILABLE  FOR YOU TO CURE YOUR DEFAULT. SOME OF THESE
 OPTIONS ARE LISTED BELOW.  YOU  MAY  CONTACT  {SERVICER}  AT  {TOLL-FREE
 NUMBER} TO DISCUSS YOUR OPTIONS.
 IF  YOU  ARE  IN DEFAULT FOR FAILURE TO PAY MAINTENANCE, YOU MAY QUALIFY
 FOR A RE-PAYMENT PLAN TO CURE THE DEFAULT BALANCE OWED.
 ATTACHED TO THIS NOTICE IS A LIST OF NEW  YORK  APPROVED  HOUSING  COUN-
 SELING AGENCIES AND LEGAL SERVICES IN YOUR AREA WHICH PROVIDE FREE COUN-
 SELING.   A   STATEWIDE   LISTING   BY   COUNTY  IS  ALSO  AVAILABLE  AT
 HTTP://WWW.DFS.NY.GOV/CONSUMER/MORTG  NYS  NP  COUNSELING  AGENCIES.HTM.
 YOU  MAY ALSO CALL YOUR LOCAL DEPARTMENT OF AGING FOR A REFERRAL 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  {SERVICER}  DIRECTLY  AT  __________ AND ASK TO
 DISCUSS ALL POSSIBLE OPTIONS TO ALLOW  YOU  TO  CURE  YOUR  DEFAULT  AND
 PREVENT  THE  FORECLOSURE  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 WILL  HAVE  THE  RIGHT  TO
 TAKE YOUR COOPERATIVE SHARES FROM YOU.
 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
 YOUR  COOPERATIVE  SHARES  AND  ARE  RESPONSIBLE  FOR THE UNIT UNTIL THE
 SHARES ARE TRANSFERRED TO A NEW OWNER THROUGH  A  SALE.  HOWEVER,  THERE
 WILL  BE  NO COURT PROCEEDING BEFORE THE SHARES ARE TRANSFERRED TO A NEW
 OWNER. AFTER THE SHARES ARE TRANSFERRED, THE NEW OWNER MAY BEGIN A COURT
 PROCEEDING TO EVICT YOU FROM THE UNIT.
 THIS NOTICE IS NOT AN EVICTION NOTICE.
   § 3. The civil practice law and rules is amended by adding a new  rule
 3410 to read as follows:
   RULE 3410. FACE-TO-FACE MEETING FOR FORECLOSURE OF REVERSE COOPERATIVE
 APARTMENT  UNIT LOANS. (A) FOR PURPOSES OF THIS RULE, DEFAULT SHALL ONLY
 INCLUDE A BORROWER'S BREACH OF AN OBLIGATION UNDER THE REVERSE  MORTGAGE
 COOPERATIVE  LOAN AGREEMENT, AND SHALL NOT INCLUDE DEATH OF THE BORROWER
 OR THE BORROWER'S PERMANENT VACATING OF THE COOPERATIVE UNIT.

 S. 7580                             9
 
   (B) IN ANY ACTION RECOVERY INVOLVING  A  BORROWER'S  DEFAULT  UNDER  A
 REVERSE  COOPERATIVE APARTMENT UNIT LOAN, AS DEFINED IN PARAGRAPH (A) OF
 SUBDIVISION ONE OF SECTION SIX-O OF THE BANKING LAW,  THE  LENDER  SHALL
 FILE  A PETITION WITH THE SUPREME COURT OF THE COUNTY IN WHICH THE COOP-
 ERATIVE APARTMENT IS LOCATED STATING THAT THE LOAN IS IN DEFAULT AND THE
 REASON  FOR  THE  DEFAULT.  THE  PETITION MUST BE SERVED ON THE BORROWER
 PURSUANT TO SECTION THREE HUNDRED EIGHT OF THIS CHAPTER. WITHIN TEN DAYS
 OF THE DATE OF SERVICE OF THE NOTICE TO  THE  BORROWER,  THE  PETITIONER
 MUST  FILE  A  SPECIALIZED  REQUEST  FOR  JUDICIAL INTERVENTION WITH THE
 CLERK. WITHIN SIXTY DAYS OF RECEIPT OF THE NOTICE OR ON  SUCH  ADJOURNED
 DATE AS HAS BEEN AGREED TO BY THE PARTIES, THE COURT SHALL HOLD A MANDA-
 TORY  SETTLEMENT  CONFERENCE  FOR  THE  PURPOSE  OF  HOLDING  SETTLEMENT
 DISCUSSIONS PERTAINING TO THE RELATIVE RIGHTS  AND  OBLIGATIONS  OF  THE
 PARTIES UNDER THE LOAN DOCUMENTS, INCLUDING, BUT NOT LIMITED TO:
   1.  DETERMINING  WHETHER  THE  PARTIES  CAN REACH A MUTUALLY AGREEABLE
 RESOLUTION TO HELP THE BORROWER AVOID  LOSING  HIS  OR  HER  COOPERATIVE
 APARTMENT  UNIT,  AND EVALUATING THE POTENTIAL FOR A RESOLUTION OR OTHER
 WORKOUT OPTIONS MAY BE AGREED; OR
   2. WHATEVER OTHER PURPOSES THE COURT DEEMS APPROPRIATE.
   (C) AT ANY MEETING HELD PURSUANT TO THIS  RULE,  THE  LENDER  AND  THE
 BORROWER  SHALL  APPEAR IN PERSON OR BY COUNSEL, AND EACH PARTY'S REPRE-
 SENTATIVE AT THE MEETING SHALL BE FULLY AUTHORIZED  TO  DISPOSE  OF  THE
 MATTER.  IF  THE  BORROWER IS APPEARING WITHOUT COUNSEL, THE COURT SHALL
 INFORM THE BORROWER OF THE NATURE OF THE ACTION AND HIS  OR  HER  RIGHTS
 AND  RESPONSIBILITIES.  WHERE  APPROPRIATE,  THE  COURT  MAY  PERMIT THE
 BORROWER OR A REPRESENTATIVE OF THE BORROWER OR THE DEFENDANT TO  ATTEND
 THE SETTLEMENT CONFERENCE TELEPHONICALLY OR BY VIDEO-CONFERENCE.
   (D) UPON THE FILING OF THE NOTICE OF DEFAULT WITH THE COURT, THE COURT
 SHALL  SEND  EITHER A COPY OF THE NOTICE OR THE BORROWER'S NAME, ADDRESS
 AND TELEPHONE NUMBER (IF AVAILABLE) TO A HOUSING  COUNSELING  AGENCY  OR
 AGENCIES  ON  A  LIST  DESIGNATED  BY  THE DEPARTMENT FOR THE GEOGRAPHIC
 REGION IN WHICH THE BORROWER RESIDES. SUCH INFORMATION SHALL BE USED  BY
 THE DESIGNATED HOUSING COUNSELING AGENCY OR AGENCIES EXCLUSIVELY FOR THE
 PURPOSE  OF MAKING THE BORROWER AWARE OF HOUSING COUNSELING AND FORECLO-
 SURE PREVENTION SERVICES AND OPTIONS AVAILABLE TO THEM.
   (E) THE COURT SHALL PROMPTLY SEND A NOTICE TO PARTIES ADVISING THEM OF
 THE TIME AND PLACE OF THE MEETING, THE PURPOSE OF THE  MEETING  AND  THE
 REQUIREMENTS  OF  THIS RULE. THE NOTICE SHALL BE IN A FORM PRESCRIBED BY
 THE COURT, AND SHALL ADVISE THE PARTIES OF THE DOCUMENTS THAT THEY SHALL
 BRING TO THE MEETING.
   (F) BOTH THE LENDER AND THE BORROWER SHALL NEGOTIATE IN GOOD FAITH  TO
 REACH  A  MUTUALLY  AGREEABLE RESOLUTION, INCLUDING BUT NOT LIMITED TO A
 RE-PAYMENT AGREEMENT, OR ANY OTHER LOSS MITIGATION, IF POSSIBLE. COMPLI-
 ANCE WITH THE OBLIGATION TO NEGOTIATE IN GOOD  FAITH  PURSUANT  TO  THIS
 RULE  SHALL  BE MEASURED BY THE TOTALITY OF THE CIRCUMSTANCES, INCLUDING
 BUT NOT LIMITED TO THE FOLLOWING FACTORS:
   1. COMPLIANCE WITH THE REQUIREMENTS OF THIS RULE AND APPLICABLE  REGU-
 LATIONS PERTAINING TO THE FACE-TO-FACE MEETING PROCESS;
   2. COMPLIANCE WITH APPLICABLE LENDING AND SERVICING LAWS, RULES, REGU-
 LATIONS,  INVESTOR DIRECTIVES, AND LOSS MITIGATION STANDARDS OR OPTIONS;
 AND
   3. CONDUCT CONSISTENT WITH  EFFORTS  TO  REACH  A  MUTUALLY  AGREEABLE
 RESOLUTION,  INCLUDING  BUT NOT LIMITED TO, AVOIDING UNREASONABLE DELAY,
 APPEARING AT THE MEETING WITH AUTHORITY TO FULLY DISPOSE OF THE  MATTER,
 AVOIDING  MOVING FORWARD TO TAKE POSSESSION WHILE LOSS MITIGATION APPLI-

 S. 7580                            10
 
 CATIONS AND ATTEMPTS ARE PENDING, AND PROVIDING ACCURATE INFORMATION  TO
 THE DEPARTMENT AND ALL PARTIES.
   NEITHER  OF THE PARTIES' FAILURE TO MAKE THE OFFER OR ACCEPT THE OFFER
 MADE BY THE OTHER PARTY IS SUFFICIENT TO ESTABLISH A FAILURE TO  NEGOTI-
 ATE IN GOOD FAITH.
   (G) UPON A FINDING BY THE COURT THAT THE PLAINTIFF FAILED TO NEGOTIATE
 IN GOOD FAITH PURSUANT TO SUBDIVISION (F) OF THIS RULE, THE COURT SHALL,
 AT  A  MINIMUM, TOLL THE ACCUMULATION AND COLLECTION OF INTEREST, COSTS,
 AND FEES DURING ANY UNDUE DELAY  CAUSED  BY  THE  PLAINTIFF,  AND  WHERE
 APPROPRIATE, THE COURT MAY ALSO IMPOSE ONE OR MORE OF THE FOLLOWING:
   1.  COMPEL  PRODUCTION  OF ANY DOCUMENTS REQUESTED BY THE COURT OR THE
 COURT'S DESIGNEE DURING THE SETTLEMENT CONFERENCE;
   2. IMPOSE A CIVIL PENALTY PAYABLE TO THE STATE THAT IS  SUFFICIENT  TO
 DETER  REPETITION  OF THE CONDUCT AND IN AN AMOUNT NOT TO EXCEED TWENTY-
 FIVE THOUSAND DOLLARS;
   3. THE COURT MAY AWARD ACTUAL DAMAGES, FEES, INCLUDING  ATTORNEY  FEES
 AND  EXPENSES  TO  THE  DEFENDANT  AS A RESULT OF PLAINTIFF'S FAILURE TO
 NEGOTIATE IN GOOD FAITH; OR
   4. AWARD ANY OTHER RELIEF THAT THE COURT DEEMS JUST AND PROPER.
   (H) A PARTY TO A DEFAULT ACTION MAY NOT CHARGE, IMPOSE,  OR  OTHERWISE
 REQUIRE  PAYMENT  FROM  THE  OTHER PARTY FOR ANY COST, INCLUDING BUT NOT
 LIMITED TO ATTORNEYS' FEES, FOR APPEARANCE AT OR  PARTICIPATION  IN  THE
 SETTLEMENT CONFERENCE PROCESS.
   (I) THIS RULE SHALL NOT APPLY IF:
   1.  THE  BORROWER DIES AND THERE IS NO SURVIVING BORROWER, UNLESS: (I)
 THE LAST SURVIVING BORROWER'S SPOUSE, IF ANY, IS A RESIDENT OF THE PROP-
 ERTY SUBJECT TO FORECLOSURE;  OR  (II)  THE  LAST  SURVIVING  BORROWER'S
 SUCCESSOR  IN INTEREST WHO BY BEQUEST OR THROUGH INTESTACY, OWNS, OR HAS
 A CLAIM TO THE OWNERSHIP OF THE PROPERTY SUBJECT TO FORECLOSURE, AND WHO
 WAS A RESIDENT OF SUCH PROPERTY AT  THE  TIME  OF  DEATH  OF  SUCH  LAST
 SURVIVING  BORROWER;  OR  THE BORROWER DOES NOT RESIDE IN THE UNIT AFTER
 SUCH NON-OCCUPANCY BY THE BORROWER AS VERIFIED BY  THE  LENDER  AND  THE
 LENDER  HAS  TAKEN  ACTION AS   REQUIRED BY SUBDIVISION EIGHT OF SECTION
 SIX-O OF THE BANKING LAW; OR
   2. A REPAYMENT PLAN OR OTHER WORKOUT CONSISTENT  WITH  THE  BORROWER'S
 CIRCUMSTANCES IS ENTERED INTO TO BRING THE BORROWER'S ACCOUNT CURRENT OR
 OTHERWISE CURE THE DEFAULT THUS MAKING A MEETING UNNECESSARY.
   §  4. The superintendent of financial services shall convene a working
 group comprised of industry and consumer representatives  to  study  the
 availability  of  reverse  mortgage  counselors  within the state of New
 York, and assess their experience and availability to provide counseling
 in connection with non-government  insured  reverse  mortgages,  and  to
 address any other matters the superintendent deems necessary pursuant to
 this  act.    The  superintendent  shall report on its findings and make
 recommendations based upon such findings.
   § 5. This act shall take effect on the one hundred eightieth day after
 it shall have become a law.  Effective immediately, the addition, amend-
 ment and/or repeal of any rule or regulation necessary for the implemen-
 tation of this act on its effective date are authorized to be  made  and
 completed on or before such effective date.