S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   2632
 
                        2019-2020 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             January 24, 2019
                                ___________
 
 Introduced   by  M.  of  A.  DINOWITZ,  WILLIAMS,  L. ROSENTHAL,  ORTIZ,
   SEAWRIGHT, ENGLEBRIGHT, HYNDMAN, BARRON, BLAKE, GLICK,  D'URSO,  DICK-
   ENS, RIVERA, GALEF, ARROYO, COOK, STERN, RICHARDSON -- Multi-Sponsored
   by  --  M. of A.   SIMON -- read once and referred 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
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD01344-01-9

 A. 2632                             2
 
 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
 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

 A. 2632                             3
 
 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-
 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

 A. 2632                             4
 
   (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
 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.

 A. 2632                             5
 
   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
 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

 A. 2632                             6
 
 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
 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.

 A. 2632                             7
 
 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-
 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,

 A. 2632                             8
 
   (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
 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.

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  2632--A
 
                        2019-2020 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             January 24, 2019
                                ___________
 
 Introduced   by  M.  of  A.  DINOWITZ,  WILLIAMS,  L. ROSENTHAL,  ORTIZ,
   SEAWRIGHT, ENGLEBRIGHT, HYNDMAN, BARRON, BLAKE, GLICK,  D'URSO,  DICK-
   ENS, RIVERA, GALEF, ARROYO, COOK, STERN, RICHARDSON -- Multi-Sponsored
   by  --  M. of A.   SIMON -- read once and referred to the Committee on
   Banks -- committee discharged,  bill  amended,  ordered  reprinted  as
   amended and recommitted to said committee
 
 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 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 AN INTEREST IN A COOPERATIVE APARTMENT THAT IS OR INTENDED TO BE  THE
 PRINCIPAL  RESIDENCE  OF THE BORROWER OR BORROWERS THE PROCEEDS OF WHICH
 ARE USED TO PURCHASE THE  PROPERTY,  OR  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.
   (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.

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD01344-04-9
              

 A. 2632--A                          2
 
   (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.
   (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  BORROWER  MAY 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, 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'  PRINCIPAL 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; AND
   (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) 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 SUSPENDS, CEASES OR MAKES LATE PAYMENTS TO A  BORROWER
 AS  PROVIDED  UNDER  A  REVERSE COOPERATIVE APARTMENT UNIT LOAN SHALL BE

 A. 2632--A                          3
 
 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  A  LENDER OR ANY SUCCESSOR OR ASSIGN IS NOT REQUIRED TO
 MAKE PAYMENTS UNDER A REVERSE COOPERATIVE APARTMENT UNIT LOAN IF A MATU-
 RITY EVENT UNDER THE LOAN HAS OCCURRED OR A 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 HOUSING COUNSELORS  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 APPROVED HOUSING COUNSELOR.
 THE FORM OF SUCH STATEMENT AND  AFFIDAVIT  SHALL  BE  DEVELOPED  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,  IF NOT A PURCHASE MONEY 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;

 A. 2632--A                          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, UPON APPROVAL OF THE SUPERINTENDENT, IF  ANY
 OF THE FOLLOWING OCCUR:
   (1)  THE  PROPERTY  CEASES TO BE THE PRINCIPAL RESIDENCE OF A BORROWER
 FOR REASONS OTHER THAN DEATH AND THE PROPERTY IS NOT THE PRINCIPAL RESI-
 DENCE 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  PRINCIPAL  RESIDENCE  OF  AT  LEAST  ONE  OTHER
 BORROWER; 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 DEVELOPMENT SHALL  ALSO  BE  SUBJECT  TO  THE  PRIOR
 APPROVAL  BY  THE  COOPERATIVE HOUSING ASSOCIATION'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

 A. 2632--A                          5
 
 UNIT  LOANS,  ENGAGE  IN ANY UNFAIR OR DECEPTIVE PRACTICES IN CONNECTION
 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 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.
   (B) 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.
   (C)  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 TWELVE 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
 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

 A. 2632--A                          6
 
 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
 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
 RECORDING OF THE LOAN IRRESPECTIVE OF THE DATE OF ANY ADVANCE OF REVERSE
 LOAN  PROCEEDS  OR THE DATE BY WHICH AN AUTHORIZED LENDER SHALL BE ENTI-
 TLED TO ACCRUED BUT UNPAID INTEREST, FEES, COSTS OR OTHER CHARGES.
   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  RECORDED  OR  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.

 A. 2632--A                          7
 
   12. 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.
   13. 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.
   14. 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 NINETY 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
 PRINCIPAL RESIDENCE
 _____ YOU DID NOT SUBMIT THE REQUIRED ANNUAL CERTIFICATE OF OCCUPANCY
 _____ THE NAMED BORROWER ON THE REVERSE LOAN HAS DIED
 _____ 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.

 A. 2632--A                          8
 
 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) IN ANY ACTION INVOLVING A REVERSE COOPERATIVE
 APARTMENT UNIT LOAN, AS DEFINED IN PARAGRAPH (A) OF SUBDIVISION  ONE  OF
 SECTION  SIX-N OF THE BANKING LAW, THE LENDER SHALL FILE A PETITION WITH
 THE SUPREME COURT OF THE COUNTY IN WHICH THE  COOPERATIVE  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 MANDATORY  SETTLE-
 MENT  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 IN WHICH

 A. 2632--A                          9
 
 PAYMENT SCHEDULES OR AMOUNTS MAY BE MODIFIED OR  OTHER  WORKOUT  OPTIONS
 MAY BE AGREED; OR
   2. WHATEVER OTHER PURPOSES THE COURT DEEMS APPROPRIATE.
   (B)  AT  ANY MEETING HELD PURSUANT TO THIS SECTION, 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.
   (C) 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.
   (D) 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 SECTION. 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.
   (E) BOTH THE LENDER AND THE BORROWER SHALL NEGOTIATE IN GOOD FAITH  TO
 REACH  A  MUTUALLY  AGREEABLE RESOLUTION, INCLUDING BUT NOT LIMITED TO A
 LOAN MODIFICATION, PAYMENT AGREEMENT, OR ANY OTHER LOSS  MITIGATION,  IF
 POSSIBLE.  COMPLIANCE  WITH  THE  OBLIGATION  TO NEGOTIATE IN GOOD FAITH
 PURSUANT TO THIS SECTION 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-
 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.
   (F) 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.
   (G) A SETTLEMENT CONFERENCE IS NOT REQUIRED IF:
   1. THE BORROWER DOES NOT RESIDE IN THE UNIT; 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. This act shall take effect on the one hundred eightieth day after
 it shall have become a law.