S T A T E O F N E W Y O R K
________________________________________________________________________
1973
2021-2022 Regular Sessions
I N A S S E M B L Y
January 13, 2021
___________
Introduced by M. of A. WEINSTEIN -- read once and referred to the
Committee on Judiciary
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
any such information relating to the loans and the mortgagor as the
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD07177-01-1
A. 1973 2
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.
A. 1973 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.