Bill Text: NY A01907 | 2019-2020 | General Assembly | Introduced

Bill Title: Establishes a reverse loan mortgage loan program for seniors; provides for the state of NY mortgage agency to establish many of the parameters for the implementation of the program; defines terms; requires a care needs assessment of each applicant; further provides that area agencies on aging shall provide counseling and assistance to applicants; requires independent counselling in compliance with HUD regulations; directs the state of New York mortgage agency to issue an annual report to the governor and the legislature.

Spectrum: Strong Partisan Bill (Democrat 12-1)

Status: (Introduced) 2019-01-17 - referred to housing [A01907 Detail]

Download: New_York-2019-A01907-Introduced.html

                STATE OF NEW YORK
                               2019-2020 Regular Sessions
                   IN ASSEMBLY
                                    January 17, 2019
        Introduced  by  M.  of  A. SIMON, JAFFEE, COOK, D'URSO, PICHARDO, BLAKE,
          MOSLEY, HYNDMAN, COLTON -- Multi-Sponsored by -- M.  of  A.  BARNWELL,
          STEC -- read once and referred to the Committee on Housing
        AN ACT to amend the public authorities law, in relation to establishment
          of a reverse mortgage loan program for seniors
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
     1    Section 1. Legislative findings. The legislature  finds  and  declares
     2  that  many  senior  citizens  living in New York own their own homes and
     3  want to continue to live at home for as long  as  possible.  Nationally,
     4  with over two trillion dollars tied up in home equity, reverse mortgages
     5  have  the  potential  to dramatically increase the ability of seniors to
     6  pay for their long-term care and remain  in  their  homes.  Today,  over
     7  eighty  percent  of  older  Americans own their own homes, seventy-three
     8  percent of which are owned free and clear of  any  mortgages.  Unlocking
     9  these resources can help "house-rich and cash-poor" seniors purchase the
    10  long-term  care  services they feel best meet their needs. Private funds
    11  from reverse mortgages also  can  strengthen  community  long-term  care
    12  systems  and  reduce the burden on state and local Medicaid budgets. The
    13  purpose of this act is to establish  a  reverse  mortgage  loan  program
    14  within  the state of New York mortgage agency to enable elderly homeown-
    15  ers to stay at home and pay for their long-term care.
    16    § 2. The public authorities law is amended by  adding  a  new  section
    17  2405-g to read as follows:
    18    §  2405-g.  Reverse  mortgage  loan program for seniors.  (1) Authori-
    19  zation. Notwithstanding any provision of law to the contrary, the agency
    20  is hereby authorized and directed to establish a reverse  mortgage  loan
    21  program  for the purpose of enabling senior homeowners to use the equity
    22  in their homes to provide for their long-term  care  needs.  The  super-
    23  intendent  of  financial services is hereby authorized to vary any rules
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.

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     1  and regulations pertaining to reverse mortgage loans to accommodate  the
     2  needs of the program.
     3    (2)  Definitions.  For  purposes  of  this section the following terms
     4  shall have the following meanings  unless  the  context  shall  indicate
     5  another or different meaning or intent:
     6    (a)  "program"  shall  mean  the  reverse  mortgage  loan  program for
     7  seniors,
     8    (b) "applicant" shall mean an individual who is  applying  to  partic-
     9  ipate in the program,
    10    (c) "borrower" shall mean an individual who is eligible to participate
    11  in the program pursuant to subdivision four of this section,
    12    (d)  "reverse  mortgage loan" shall mean a loan for a term of years to
    13  be determined by the agency, in which loan proceeds are  advanced  to  a
    14  borrower  in  equal,  monthly  installments  and may include an initial,
    15  one-time lump sum payment of up to five thousand dollars,
    16    (e) "loan" shall mean a reverse mortgage loan issued pursuant  to  the
    17  terms of this section,
    18    (f)  "income" shall mean income that does not exceed the income limits
    19  established by the agency, and
    20    (g) "assessment" shall mean the care  needs  assessment  described  in
    21  subdivision five of this section.
    22    (3)  Terms  and conditions of the loan.  Loans shall only be issued to
    23  applicants who own and occupy a single family dwelling, a condominium or
    24  a co-op.  If a borrower vacates his or her residence, the loan  payments
    25  shall  cease  and  the  balance of the loan shall become due. A borrower
    26  shall notify the agency upon vacating  his  or  her  residence.    Loans
    27  issued  by  the  program  shall  offer a low, fixed interest rate, to be
    28  determined by the agency. Any loan origination fees,  closing  costs  or
    29  fees charged by the program shall be at a reduced rate, to be determined
    30  by  the agency. The agency shall not impose pre-payment penalties on any
    31  loan. The loan shall also include the cost of the care needs  assessment
    32  required  under  subdivision  five  of  this section. Loans shall not be
    33  issued to borrowers whose  income  exceeds  the  maximum  income  limits
    34  established  by  the  agency.    Loans shall not be issued for more than
    35  eighty percent of the value of the borrower's  home,  with  minimum  and
    36  maximum  loan  amounts  to be determined by the agency on a case by case
    37  basis.
    38    In its determination of minimum and maximum loan amounts,  the  agency
    39  shall consider the following criteria:
    40    (a)  the  amount  of  the  applicant's  personal and household income,
    41  assets, and other financial resources available to meet the needs of the
    42  applicant and the applicant's household;
    43    (b) the value of the applicant's residence as determined by the  agen-
    44  cy; and
    45    (c) the information contained in the applicant's care needs assessment
    46  provided  by  an  area  agency  on aging, including the special needs of
    47  particular applicants because of  physical  or  mental  disabilities  or
    48  impairments.
    49    (4)  Eligibility  of  applicants.  In  order  to  be  eligible for the
    50  program, an applicant must be an  individual  age  sixty-five  years  or
    51  older,  be  the owner and occupant of a single family dwelling or condo-
    52  minium, who has lost some or all of the capacity to function on  his  or
    53  her  own  due  to  a  chronic illness or condition, and who, based on an
    54  assessment performed by an area agency on aging pursuant to  subdivision
    55  five  of this section, requires or is expected to require one or more of
    56  the following items or services for an extended period of  time  of  six

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     1  consecutive  months  or  more: home care, including nursing and personal
     2  care services, homemaker and chore services,  including  chore  services
     3  related  to  home maintenance or repair, nutrition services, transporta-
     4  tion,  counseling,  physical  therapy  and  other medical or non-medical
     5  support services, respite, adult day care,  durable  medical  equipment,
     6  medically  indicated  home  alterations,  and  uninsured catastrophic or
     7  recurring medical expenses including prescription drugs. An  applicant's
     8  personal  and  household income may not exceed the maximum income limits
     9  established by the agency.
    10    (5) Care needs assessment. As part of the loan  approval  process,  an
    11  area  agency  on  aging shall conduct an assessment of each applicant in
    12  order to identify the  applicant's  care  needs,  including  information
    13  necessary  to determine whether the applicant requires or is expected to
    14  require one or more of the items or services  specified  in  subdivision
    15  four of this section, and if so, which items or services are required or
    16  expected  to  be  required, the duration for which the items or services
    17  are expected to be required, and the estimated  cost  of  the  items  or
    18  services. The assessment shall be conducted face-to-face with the appli-
    19  cant,  and,  if requested by the applicant, his or her authorized repre-
    20  sentative and informal caregivers, using the  standardized  process  and
    21  instrument  prescribed  by the office for the aging for expanded in-home
    22  services for the elderly program (EISEP) clients, unless the area agency
    23  has received approval from said office to use  a  different  instrument.
    24  All  information  derived  from the assessment of the applicant shall be
    25  confidential and shared only with others involved in the arrangement  or
    26  provision  of services to the applicant pursuant to written consent from
    27  the applicant or his or her authorized representative. If, based on  the
    28  assessment,  the  applicant  is  determined  to  have  a  need for or is
    29  expected to need any of the items or services contained  in  subdivision
    30  four of this section, such applicant shall be deemed functionally eligi-
    31  ble for the program.
    32    (6)  Counseling  and  assistance.  The  area  agencies  on aging shall
    33  provide counseling and assistance to applicants who  wish  to  obtain  a
    34  reverse  mortgage loan from the program. Counseling and assistance shall
    35  include the following:
    36    (a) reviewing with the applicant the terms  and  restrictions  of  the
    37  loan,  including  assisting  the  applicant with determining whether the
    38  loan would jeopardize the applicant's eligibility for Medicaid and other
    39  means-tested programs;
    40    (b) identifying community based long-term care services, in accordance
    41  with the applicant's needs as demonstrated in the care needs assessment,
    42  including medical and non-medical in-home support programs, and  provid-
    43  ing  information  on  how  to  access these services, including provider
    44  directories, and case management services;
    45    (c) exploring with the applicant  the  possibility  of  the  applicant
    46  becoming unable to manage his or her finances, and in this event, having
    47  the  applicant  consider  who  he or she would want to manage his or her
    48  finances, and advising the applicant of the need to obtain estate  plan-
    49  ning  counseling  and  proper legal documentation in order to effectuate
    50  his or her wishes under these circumstances; and
    51    (d) discussing with the applicant his  or  her  wishes  regarding  how
    52  title  of  the  residence  should  be  transferred upon the death of the
    53  applicant, and advising the applicant of the need to obtain estate plan-
    54  ning counseling and proper legal documentation in order to  ensure  that
    55  his or her wishes are carried out.

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     1    (7)  (a)  Prior  to  accepting  a final and complete application for a
     2  reverse mortgage the lender shall provide the borrower with  a  list  of
     3  not  fewer  than ten counseling agencies that are approved by the United
     4  States Department of Housing and Urban Development to engage in  reverse
     5  mortgage  counseling as provided in Subpart B of Part 214 of Title 24 of
     6  the Code of Federal Regulations. The counseling agency shall not receive
     7  any compensation, either directly or indirectly, from the lender or from
     8  any other person or entity involved  in  originating  or  servicing  the
     9  mortgage  or  the  sale of annuities, investments, long-term care insur-
    10  ance, or any other type of financial or insurance product. This subdivi-
    11  sion shall not prevent a  counseling  agency  from  receiving  financial
    12  assistance  that  is  unrelated  to the offering or selling of a reverse
    13  mortgage loan and that is provided by the lender as part  of  charitable
    14  or philanthropic activities.
    15    (b)  A  lender shall not accept a final and complete application for a
    16  reverse mortgage loan from a prospective applicant or  assess  any  fees
    17  upon  a prospective applicant without first receiving certification from
    18  the applicant or the  applicant's  authorized  representative  that  the
    19  applicant  has  received counseling from an agency as described in para-
    20  graph (a) of this subdivision and that the counseling was  conducted  in
    21  person, unless the certification specifies that the applicant elected to
    22  receive  the  counseling  in  a manner other than in person. The certif-
    23  ication shall be signed by the borrower and the  agency  counselor,  and
    24  shall  include  the  date  of  the counseling and the name, address, and
    25  telephone number of both the counselor  and  the  applicant.  Electronic
    26  facsimile  copy  of  the  housing counseling certification satisfies the
    27  requirements of this subdivision. The lender shall maintain the  certif-
    28  ication in an accurate, reproducible, and accessible format for the term
    29  of the reverse mortgage.
    30    (c)  A  lender  shall  not  make a reverse mortgage loan without first
    31  complying with, or in the case of  brokered  loans  ensuring  compliance
    32  with, the requirements of this subdivision.
    33    (8) Outreach by the program. The agency shall advertise the program in
    34  a  brochure which it shall create and distribute to each area office for
    35  the aging. The agency shall provide the brochure to  each  local  social
    36  services  district  to  distribute  to  individuals who are applying for
    37  Medicaid nursing home or home care services.
    38    (9) Report. The agency shall issue an annual report to  the  governor,
    39  the  temporary  president of the senate and the speaker of the assembly.
    40  Such report shall contain, at a minimum, the following information:  the
    41  number of loan applications submitted to the program, the number of loan
    42  applications approved and the number denied, the reasons for denial, the
    43  number  of  loans  issued  by  the  program, the incomes and ages of the
    44  borrowers, the purpose for which a loan was issued, any suggestions  for
    45  improving  or  expanding the program, and a description of the program's
    46  funding sources and whether they are adequate.
    47    (10) Rulemaking authority. The agency shall adopt all  procedural  and
    48  substantive  rules and regulations necessary to implement and administer
    49  the provisions of this section.
    50    § 3. This act shall take effect on the one hundred eightieth day after
    51  it shall have become a law.