S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                    884
 
                        2021-2022 Regular Sessions
 
                             I N  S E N A T E
 
                                (PREFILED)
 
                              January 6, 2021
                                ___________
 
 Introduced by Sen. GOUNARDES -- read twice and ordered printed, and when
   printed to be committed to the Committee on Rules
 
 AN ACT to amend the real property law, in relation to filings concerning
   reverse mortgage loans

   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Section 280-d of the real property law, as added by a chap-
 ter of the laws of 2020 amending the real property law relating  to  the
 regulation  of default and foreclosure of reverse mortgages issued under
 the federal home equity conversion  mortgage  for  seniors  program,  as
 proposed in legislative bills numbers S. 4408 and A. 5627, is amended to
 read as follows:
   §  280-d. Federal home equity conversion mortgage default and foreclo-
 sure regulation. 1. For the purposes  of  this  section,  the  following
 terms shall have the following meanings:
   (a)  Reverse  mortgage  loan.  A  reverse  mortgage loan as defined in
 section two hundred eighty of this article,  which  is  issued  in  this
 state  pursuant  to  the  home  equity  conversion  mortgage for seniors
 program operated by the federal Department of Housing and Urban Develop-
 ment.
   (b) Authorized lender. An authorized lender as defined in section  two
 hundred  eighty  of  this  article  authorized  to make reverse mortgage
 loans, as defined in this section.
   (c) Department.  The  department  of  financial  services  established
 pursuant to section one hundred two of the financial services law.
   2.  [In  the event of a default or foreclosure upon a reverse mortgage
 loan, the authorized lender, upon the commencement  of  the  foreclosure
 proceeding,  shall  transmit  to  the  department proof that the federal
 Department of Housing and Urban Development has granted  prior  approval
 to accelerate the loan, proof of the default notice to the mortgagor and

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
              

                       [ ] is old law to be omitted.
                                                            LBD07177-01-1

 S. 884                              2

 any  such  information  relating  to  the loans and the mortgagor as the
 department shall determine to be necessary. Upon receipt of such  infor-
 mation,  the department shall provide notice of and information relating
 to  the foreclosure to the mortgagor. Such notice shall include a notice
 of the mortgagor's rights in the foreclosure process and contact  infor-
 mation  for  legal service organizations which may be able to assist the
 mortgagor with the mortgage default and/or foreclosure.
   3. No reverse mortgage loan commitment shall be issued by  an  author-
 ized  lender  unless such commitment provides in writing notice that the
 department will be provided notice of any default  or  foreclosure  upon
 the loan so as to provide assistance to the mortgagor.
   4.  No  authorized  lender shall make an advance payment for any obli-
 gation arising from mortgaged real property. Furthermore, in the event a
 mortgagor defaults upon the payment of mortgage insurance premium, home-
 owners insurance premium or real property tax related to  the  mortgaged
 property, the authorized lender may only pay those premiums and/or taxes
 which are in arrears.
   5.  The department shall issue regulations which shall require mortga-
 gees  to  engage in mandatory loss mitigation procedures to be specified
 by the department. These loss mitigation procedures  shall  comply  with
 any  restrictions on loss mitigation issued by the federal Department of
 Housing and Urban Development for reverse mortgages and shall be updated
 when necessary to ensure compliance with federal rules.   The  mortgagee
 shall  provide  information to the department about loans receiving such
 loss mitigation assistance.  This includes maintaining loan level,  loss
 mitigation data and providing the department with the following informa-
 tion  for  loans  associated  with a repayment plan:] IN ADDITION TO THE
 REQUIREMENTS OF SECTION ONE THOUSAND THREE  HUNDRED  FOUR  OF  THE  REAL
 PROPERTY ACTIONS AND PROCEEDINGS LAW, AN AUTHORIZED LENDER SHALL INCLUDE
 IN  THE  NOTICE  REQUIRED  BY  SUCH  SECTION  ANY ADDITIONAL INFORMATION
 REQUIRED BY THE DEPARTMENT.  THE  DEPARTMENT  IS  HEREBY  AUTHORIZED  TO
 PROMULGATE RULES AND REGULATIONS REQUIRING THAT A NOTICE ISSUED PURSUANT
 TO  SUBDIVISION  ONE-A OF SECTION ONE THOUSAND THREE HUNDRED FOUR OF THE
 REAL PROPERTY ACTIONS AND PROCEEDINGS LAW INCLUDE ADDITIONAL INFORMATION
 NECESSARY TO EXPLAIN THE MORTGAGOR'S RIGHTS IN A FORECLOSURE PROCESS.
   3. IN ADDITION TO THE  REQUIREMENTS  OF  SECTION  ONE  THOUSAND  THREE
 HUNDRED  SIX  OF  THE  REAL  PROPERTY  ACTIONS AND PROCEEDINGS LAW, EACH
 FILING WITH THE DEPARTMENT THAT RELATES TO A REVERSE MORTGAGE LOAN SHALL
 INCLUDE AN AFFIRMATIVE STATEMENT THAT THE LENDER, ASSIGNEE  OR  MORTGAGE
 LOAN SERVICER EITHER RECEIVED FINAL APPROVAL FROM THE FEDERAL DEPARTMENT
 OF HOUSING AND URBAN DEVELOPMENT TO ACCELERATE THE REVERSE MORTGAGE LOAN
 THAT  IS  THE  SUBJECT  OF  THE FILING OR THAT NO SUCH APPROVAL FROM THE
 FEDERAL DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT IS REQUIRED.
   4. AUTHORIZED LENDERS SHALL COMPLY WITH  ALL  APPLICABLE  LAWS,  REGU-
 LATIONS  AND  ANY GUIDELINES ISSUED BY THE FEDERAL DEPARTMENT OF HOUSING
 AND URBAN DEVELOPMENT ON LOSS MITIGATION FOR REVERSE MORTGAGES AND SHALL
 MAINTAIN POLICIES ON LOSS MITIGATION THAT SHALL BE UPDATED  WHEN  NECES-
 SARY  TO  ENSURE  COMPLIANCE  WITH ALL APPLICABLE RULES. EACH AUTHORIZED
 LENDER SHALL MAINTAIN LOAN LEVEL DATA AND LOSS MITIGATION DATA  FOR  ALL
 LOANS ASSOCIATED WITH A REPAYMENT PLAN INCLUDING, BUT NOT LIMITED TO:
   (a) monthly surplus income;
   (b) term of repayment plan;
   (c) amount of monthly repayment plan [payment];
   (d) due date of [next] EACH monthly payment;
   (e) when a mortgagor experiences a hardship; and
   (f) [reason for] THE NATURE OF THE hardship.

 S. 884                              3
 
   [6.]  5. Any person who has been injured by reason of any violation of
 this section may bring an action in his  or  her  own  name  to  recover
 treble  his  or  her  actual  damages,  plus  the prevailing plaintiff's
 reasonable attorney's fees.
   [7.] 6. The requirements of this section shall be conditions precedent
 to commencing an action to foreclose upon a home equity conversion mort-
 gage  which is subject to the provisions of this section, and failure to
 comply therewith shall be a complete defense to a foreclosure action.
   § 2. This act shall take effect on the  same  date  and  in  the  same
 manner  as  a chapter of the laws of 2020 amending the real property law
 relating to the regulation of default and foreclosure of  reverse  mort-
 gages  issued  under  the  federal  home  equity conversion mortgage for
 seniors program, as proposed in legislative bills numbers S. 4408 and A.
 5627, takes effect.