Bill Text: NY S00884 | 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: (Passed) 2021-02-16 - SIGNED CHAP.48 [S00884 Detail]

Download: New_York-2021-S00884-Introduced.html

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                STATE OF NEW YORK
        ________________________________________________________________________

                                           884

                               2021-2022 Regular Sessions

                    IN SENATE

                                       (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:

     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

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD07177-01-1
        S. 884                              2

     1  any  such  information  relating  to  the loans and the mortgagor as the
     2  department shall determine to be necessary. Upon receipt of such  infor-
     3  mation,  the department shall provide notice of and information relating
     4  to  the foreclosure to the mortgagor. Such notice shall include a notice
     5  of the mortgagor's rights in the foreclosure process and contact  infor-
     6  mation  for  legal service organizations which may be able to assist the
     7  mortgagor with the mortgage default and/or foreclosure.
     8    3. No reverse mortgage loan commitment shall be issued by  an  author-
     9  ized  lender  unless such commitment provides in writing notice that the
    10  department will be provided notice of any default  or  foreclosure  upon
    11  the loan so as to provide assistance to the mortgagor.
    12    4.  No  authorized  lender shall make an advance payment for any obli-
    13  gation arising from mortgaged real property. Furthermore, in the event a
    14  mortgagor defaults upon the payment of mortgage insurance premium, home-
    15  owners insurance premium or real property tax related to  the  mortgaged
    16  property, the authorized lender may only pay those premiums and/or taxes
    17  which are in arrears.
    18    5.  The department shall issue regulations which shall require mortga-
    19  gees  to  engage in mandatory loss mitigation procedures to be specified
    20  by the department. These loss mitigation procedures  shall  comply  with
    21  any  restrictions on loss mitigation issued by the federal Department of
    22  Housing and Urban Development for reverse mortgages and shall be updated
    23  when necessary to ensure compliance with federal rules.   The  mortgagee
    24  shall  provide  information to the department about loans receiving such
    25  loss mitigation assistance.  This includes maintaining loan level,  loss
    26  mitigation data and providing the department with the following informa-
    27  tion  for  loans  associated  with a repayment plan:] In addition to the
    28  requirements of section one thousand three  hundred  four  of  the  real
    29  property actions and proceedings law, an authorized lender shall include
    30  in  the  notice  required  by  such  section  any additional information
    31  required by the department.  The  department  is  hereby  authorized  to
    32  promulgate rules and regulations requiring that a notice issued pursuant
    33  to  subdivision  one-a of section one thousand three hundred four of the
    34  real property actions and proceedings law include additional information
    35  necessary to explain the mortgagor's rights in a foreclosure process.
    36    3. In addition to the  requirements  of  section  one  thousand  three
    37  hundred  six  of  the  real  property  actions and proceedings law, each
    38  filing with the department that relates to a reverse mortgage loan shall
    39  include an affirmative statement that the lender, assignee  or  mortgage
    40  loan servicer either received final approval from the federal Department
    41  of Housing and Urban Development to accelerate the reverse mortgage loan
    42  that  is  the  subject  of  the filing or that no such approval from the
    43  federal Department of Housing and Urban Development is required.
    44    4. Authorized lenders shall comply with  all  applicable  laws,  regu-
    45  lations  and  any guidelines issued by the federal Department of Housing
    46  and Urban Development on loss mitigation for reverse mortgages and shall
    47  maintain policies on loss mitigation that shall be updated  when  neces-
    48  sary  to  ensure  compliance  with all applicable rules. Each authorized
    49  lender shall maintain loan level data and loss mitigation data  for  all
    50  loans associated with a repayment plan including, but not limited to:
    51    (a) monthly surplus income;
    52    (b) term of repayment plan;
    53    (c) amount of monthly repayment plan [payment];
    54    (d) due date of [next] each monthly payment;
    55    (e) when a mortgagor experiences a hardship; and
    56    (f) [reason for] the nature of the hardship.
        S. 884                              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.