The New York State Senate

                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  9095

                          I N  A S S E M B L Y

                            January 17, 2020
                               ___________

Introduced by M. of A. DINOWITZ -- read once and referred to the Commit-
  tee 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

A. 9095                             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

A. 9095                             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;

A. 9095                             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

A. 9095                             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

A. 9095                             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

A. 9095                             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

A. 9095                             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.

A. 9095                             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-

A. 9095                            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.