Bill Text: NY A01973 | 2021-2022 | General Assembly | Introduced

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Bill Title: Relates to filings concerning reverse mortgage loans.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2021-02-01 - substituted by s884 [A01973 Detail]

Download: New_York-2021-A01973-Introduced.html

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                STATE OF NEW YORK
        ________________________________________________________________________

                                          1973

                               2021-2022 Regular Sessions

                   IN ASSEMBLY

                                    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:

     1    Section 1. Section 280-d of the real property law, as added by a chap-
     2  ter  of  the laws of 2020 amending the real property law relating to the
     3  regulation of default and foreclosure of reverse mortgages issued  under
     4  the  federal  home  equity  conversion  mortgage for seniors program, as
     5  proposed in legislative bills numbers S. 4408 and A. 5627, is amended to
     6  read as follows:
     7    § 280-d. Federal home equity conversion mortgage default and  foreclo-
     8  sure  regulation.  1.  For  the  purposes of this section, the following
     9  terms shall have the following meanings:
    10    (a) Reverse mortgage loan. A  reverse  mortgage  loan  as  defined  in
    11  section  two  hundred  eighty  of  this article, which is issued in this
    12  state pursuant to  the  home  equity  conversion  mortgage  for  seniors
    13  program operated by the federal Department of Housing and Urban Develop-
    14  ment.
    15    (b)  Authorized lender. An authorized lender as defined in section two
    16  hundred eighty of this  article  authorized  to  make  reverse  mortgage
    17  loans, as defined in this section.
    18    (c)  Department.  The  department  of  financial  services established
    19  pursuant to section one hundred two of the financial services law.
    20    2. [In the event of a default or foreclosure upon a  reverse  mortgage
    21  loan,  the  authorized  lender, upon the commencement of the foreclosure
    22  proceeding, shall transmit to the  department  proof  that  the  federal
    23  Department  of  Housing and Urban Development has granted prior approval
    24  to accelerate the loan, proof of the default notice to the mortgagor and
    25  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

     1  department  shall determine to be necessary. Upon receipt of such infor-
     2  mation, the department shall provide notice of and information  relating
     3  to  the foreclosure to the mortgagor. Such notice shall include a notice
     4  of  the mortgagor's rights in the foreclosure process and contact infor-
     5  mation for legal service organizations which may be able to  assist  the
     6  mortgagor with the mortgage default and/or foreclosure.
     7    3.  No  reverse mortgage loan commitment shall be issued by an author-
     8  ized lender unless such commitment provides in writing notice  that  the
     9  department  will  be  provided notice of any default or foreclosure upon
    10  the loan so as to provide assistance to the mortgagor.
    11    4. No authorized lender shall make an advance payment  for  any  obli-
    12  gation arising from mortgaged real property. Furthermore, in the event a
    13  mortgagor defaults upon the payment of mortgage insurance premium, home-
    14  owners  insurance  premium or real property tax related to the mortgaged
    15  property, the authorized lender may only pay those premiums and/or taxes
    16  which are in arrears.
    17    5.  The department shall issue regulations which shall require mortga-
    18  gees to engage in mandatory loss mitigation procedures to  be  specified
    19  by  the  department.  These loss mitigation procedures shall comply with
    20  any restrictions on loss mitigation issued by the federal Department  of
    21  Housing and Urban Development for reverse mortgages and shall be updated
    22  when  necessary  to ensure compliance with federal rules.  The mortgagee
    23  shall provide information to the department about loans  receiving  such
    24  loss  mitigation assistance.  This includes maintaining loan level, loss
    25  mitigation data and providing the department with the following informa-
    26  tion for loans associated with a repayment plan:]  In  addition  to  the
    27  requirements  of  section  one  thousand  three hundred four of the real
    28  property actions and proceedings law, an authorized lender shall include
    29  in the notice  required  by  such  section  any  additional  information
    30  required  by  the  department.  The  department  is hereby authorized to
    31  promulgate rules and regulations requiring that a notice issued pursuant
    32  to subdivision one-a of section one thousand three hundred four  of  the
    33  real property actions and proceedings law include additional information
    34  necessary to explain the mortgagor's rights in a foreclosure process.
    35    3.  In  addition  to  the  requirements  of section one thousand three
    36  hundred six of the real  property  actions  and  proceedings  law,  each
    37  filing with the department that relates to a reverse mortgage loan shall
    38  include  an  affirmative statement that the lender, assignee or mortgage
    39  loan servicer either received final approval from the federal Department
    40  of Housing and Urban Development to accelerate the reverse mortgage loan
    41  that is the subject of the filing or that  no  such  approval  from  the
    42  federal Department of Housing and Urban Development is required.
    43    4.  Authorized  lenders  shall  comply with all applicable laws, regu-
    44  lations and any guidelines issued by the federal Department  of  Housing
    45  and Urban Development on loss mitigation for reverse mortgages and shall
    46  maintain  policies  on loss mitigation that shall be updated when neces-
    47  sary to ensure compliance with all  applicable  rules.  Each  authorized
    48  lender  shall  maintain loan level data and loss mitigation data for all
    49  loans associated with a repayment plan including, but not limited to:
    50    (a) monthly surplus income;
    51    (b) term of repayment plan;
    52    (c) amount of monthly repayment plan [payment];
    53    (d) due date of [next] each monthly payment;
    54    (e) when a mortgagor experiences a hardship; and
    55    (f) [reason for] the nature of the hardship.
        A. 1973                             3

     1    [6.] 5. Any person who has been injured by reason of any violation  of
     2  this  section  may  bring  an  action  in his or her own name to recover
     3  treble his or  her  actual  damages,  plus  the  prevailing  plaintiff's
     4  reasonable attorney's fees.
     5    [7.] 6. The requirements of this section shall be conditions precedent
     6  to commencing an action to foreclose upon a home equity conversion mort-
     7  gage  which is subject to the provisions of this section, and failure to
     8  comply therewith shall be a complete defense to a foreclosure action.
     9    § 2. This act shall take effect on the  same  date  and  in  the  same
    10  manner  as  a chapter of the laws of 2020 amending the real property law
    11  relating to the regulation of default and foreclosure of  reverse  mort-
    12  gages  issued  under  the  federal  home  equity conversion mortgage for
    13  seniors program, as proposed in legislative bills numbers S. 4408 and A.
    14  5627, takes effect.