S T A T E O F N E W Y O R K
________________________________________________________________________
6987
2013-2014 Regular Sessions
I N A S S E M B L Y
April 29, 2013
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Introduced by M. of A. MILLMAN -- read once and referred to the Commit-
tee 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:
Section 1. Legislative findings. The legislature finds and declares
that many senior citizens living in New York own their own homes and
want to continue to live at home for as long as possible. Nationally,
with over two trillion dollars tied up in home equity, reverse mortgages
have the potential to dramatically increase the ability of seniors to
pay for their long-term care and remain in their homes. Today, over
eighty percent of older Americans own their own homes, seventy-three
percent of which are owned free and clear of any mortgages. Unlocking
these resources can help "house-rich and cash-poor" seniors purchase the
long-term care services they feel best meet their needs. Private funds
from reverse mortgages also can strengthen community long-term care
systems and reduce the burden on state and local Medicaid budgets. The
purpose of this act is to establish a reverse mortgage loan program
within the state of New York mortgage agency to enable elderly homeown-
ers to stay at home and pay for their long-term care.
S 2. The public authorities law is amended by adding a new section
2405-f to read as follows:
S 2405-F. REVERSE MORTGAGE LOAN PROGRAM FOR SENIORS. (1) AUTHORI-
ZATION. NOTWITHSTANDING ANY PROVISION OF LAW TO THE CONTRARY, THE AGENCY
IS HEREBY AUTHORIZED AND DIRECTED TO ESTABLISH A REVERSE MORTGAGE LOAN
PROGRAM FOR THE PURPOSE OF ENABLING SENIOR HOMEOWNERS TO USE THE EQUITY
IN THEIR HOMES TO PROVIDE FOR THEIR LONG-TERM CARE NEEDS. THE SUPER-
INTENDENT OF FINANCIAL SERVICES IS HEREBY AUTHORIZED TO VARY ANY RULES
AND REGULATIONS PERTAINING TO REVERSE MORTGAGE LOANS TO ACCOMMODATE THE
NEEDS OF THE PROGRAM.
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD10334-02-3
A. 6987 2
(2) DEFINITIONS. FOR PURPOSES OF THIS SECTION THE FOLLOWING TERMS
SHALL HAVE THE FOLLOWING MEANINGS UNLESS THE CONTEXT SHALL INDICATE
ANOTHER OR DIFFERENT MEANING OR INTENT:
(A) "PROGRAM" SHALL MEAN THE REVERSE MORTGAGE LOAN PROGRAM FOR
SENIORS,
(B) "APPLICANT" SHALL MEAN AN INDIVIDUAL WHO IS APPLYING TO PARTIC-
IPATE IN THE PROGRAM,
(C) "BORROWER" SHALL MEAN AN INDIVIDUAL WHO IS ELIGIBLE TO PARTICIPATE
IN THE PROGRAM PURSUANT TO SUBDIVISION FOUR OF THIS SECTION,
(D) "REVERSE MORTGAGE LOAN" SHALL MEAN A LOAN FOR A TERM OF YEARS TO
BE DETERMINED BY THE AGENCY, IN WHICH LOAN PROCEEDS ARE ADVANCED TO A
BORROWER IN EQUAL, MONTHLY INSTALLMENTS AND MAY INCLUDE AN INITIAL,
ONE-TIME LUMP SUM PAYMENT OF UP TO FIVE THOUSAND DOLLARS,
(E) "LOAN" SHALL MEAN A REVERSE MORTGAGE LOAN ISSUED PURSUANT TO THE
TERMS OF THIS SECTION,
(F) "INCOME" SHALL MEAN INCOME THAT DOES NOT EXCEED THE INCOME LIMITS
ESTABLISHED BY THE AGENCY, AND
(G) "ASSESSMENT" SHALL MEAN THE CARE NEEDS ASSESSMENT DESCRIBED IN
SUBDIVISION FIVE OF THIS SECTION.
(3) TERMS AND CONDITIONS OF THE LOAN. LOANS SHALL ONLY BE ISSUED TO
APPLICANTS WHO OWN AND OCCUPY A SINGLE FAMILY DWELLING, A CONDOMINIUM OR
A CO-OP. IF A BORROWER VACATES HIS OR HER RESIDENCE, THE LOAN PAYMENTS
SHALL CEASE AND THE BALANCE OF THE LOAN SHALL BECOME DUE. A BORROWER
SHALL NOTIFY THE AGENCY UPON VACATING HIS OR HER RESIDENCE. LOANS
ISSUED BY THE PROGRAM SHALL OFFER A LOW, FIXED INTEREST RATE, TO BE
DETERMINED BY THE AGENCY. ANY LOAN ORIGINATION FEES, CLOSING COSTS OR
FEES CHARGED BY THE PROGRAM SHALL BE AT A REDUCED RATE, TO BE DETERMINED
BY THE AGENCY. THE AGENCY SHALL NOT IMPOSE PRE-PAYMENT PENALTIES ON ANY
LOAN. THE LOAN SHALL ALSO INCLUDE THE COST OF THE CARE NEEDS ASSESSMENT
REQUIRED UNDER SUBDIVISION FIVE OF THIS SECTION. LOANS SHALL NOT BE
ISSUED TO BORROWERS WHOSE INCOME EXCEEDS THE MAXIMUM INCOME LIMITS
ESTABLISHED BY THE AGENCY. LOANS SHALL NOT BE ISSUED FOR MORE THAN
EIGHTY PERCENT OF THE VALUE OF THE BORROWER'S HOME, WITH MINIMUM AND
MAXIMUM LOAN AMOUNTS TO BE DETERMINED BY THE AGENCY ON A CASE BY CASE
BASIS.
IN ITS DETERMINATION OF MINIMUM AND MAXIMUM LOAN AMOUNTS, THE AGENCY
SHALL CONSIDER THE FOLLOWING CRITERIA:
(A) THE AMOUNT OF THE APPLICANT'S PERSONAL AND HOUSEHOLD INCOME,
ASSETS, AND OTHER FINANCIAL RESOURCES AVAILABLE TO MEET THE NEEDS OF THE
APPLICANT AND THE APPLICANT'S HOUSEHOLD;
(B) THE VALUE OF THE APPLICANT'S RESIDENCE AS DETERMINED BY THE AGEN-
CY; AND
(C) THE INFORMATION CONTAINED IN THE APPLICANT'S CARE NEEDS ASSESSMENT
PROVIDED BY AN AREA AGENCY ON AGING, INCLUDING THE SPECIAL NEEDS OF
PARTICULAR APPLICANTS BECAUSE OF PHYSICAL OR MENTAL DISABILITIES OR
IMPAIRMENTS.
(4) ELIGIBILITY OF APPLICANTS. IN ORDER TO BE ELIGIBLE FOR THE
PROGRAM, AN APPLICANT MUST BE AN INDIVIDUAL AGE SIXTY-FIVE YEARS OR
OLDER, BE THE OWNER AND OCCUPANT OF A SINGLE FAMILY DWELLING OR CONDO-
MINIUM, WHO HAS LOST SOME OR ALL OF THE CAPACITY TO FUNCTION ON HIS OR
HER OWN DUE TO A CHRONIC ILLNESS OR CONDITION, AND WHO, BASED ON AN
ASSESSMENT PERFORMED BY AN AREA AGENCY ON AGING PURSUANT TO SUBDIVISION
FIVE OF THIS SECTION, REQUIRES OR IS EXPECTED TO REQUIRE ONE OR MORE OF
THE FOLLOWING ITEMS OR SERVICES FOR AN EXTENDED PERIOD OF TIME OF SIX
CONSECUTIVE MONTHS OR MORE: HOME CARE, INCLUDING NURSING AND PERSONAL
CARE SERVICES, HOMEMAKER AND CHORE SERVICES, INCLUDING CHORE SERVICES
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RELATED TO HOME MAINTENANCE OR REPAIR, NUTRITION SERVICES, TRANSPORTA-
TION, COUNSELING, PHYSICAL THERAPY AND OTHER MEDICAL OR NON-MEDICAL
SUPPORT SERVICES, RESPITE, ADULT DAY CARE, DURABLE MEDICAL EQUIPMENT,
MEDICALLY INDICATED HOME ALTERATIONS, AND UNINSURED CATASTROPHIC OR
RECURRING MEDICAL EXPENSES INCLUDING PRESCRIPTION DRUGS. AN APPLICANT'S
PERSONAL AND HOUSEHOLD INCOME MAY NOT EXCEED THE MAXIMUM INCOME LIMITS
ESTABLISHED BY THE AGENCY.
(5) CARE NEEDS ASSESSMENT. AS PART OF THE LOAN APPROVAL PROCESS, AN
AREA AGENCY ON AGING SHALL CONDUCT AN ASSESSMENT OF EACH APPLICANT IN
ORDER TO IDENTIFY THE APPLICANT'S CARE NEEDS, INCLUDING INFORMATION
NECESSARY TO DETERMINE WHETHER THE APPLICANT REQUIRES OR IS EXPECTED TO
REQUIRE ONE OR MORE OF THE ITEMS OR SERVICES SPECIFIED IN SUBDIVISION
FOUR OF THIS SECTION, AND IF SO, WHICH ITEMS OR SERVICES ARE REQUIRED OR
EXPECTED TO BE REQUIRED, THE DURATION FOR WHICH THE ITEMS OR SERVICES
ARE EXPECTED TO BE REQUIRED, AND THE ESTIMATED COST OF THE ITEMS OR
SERVICES. THE ASSESSMENT SHALL BE CONDUCTED FACE-TO-FACE WITH THE APPLI-
CANT, AND, IF REQUESTED BY THE APPLICANT, HIS OR HER AUTHORIZED REPRE-
SENTATIVE AND INFORMAL CAREGIVERS, USING THE STANDARDIZED PROCESS AND
INSTRUMENT PRESCRIBED BY THE OFFICE FOR THE AGING FOR EXPANDED IN-HOME
SERVICES FOR THE ELDERLY PROGRAM (EISEP) CLIENTS, UNLESS THE AREA AGENCY
HAS RECEIVED APPROVAL FROM SAID OFFICE TO USE A DIFFERENT INSTRUMENT.
ALL INFORMATION DERIVED FROM THE ASSESSMENT OF THE APPLICANT SHALL BE
CONFIDENTIAL AND SHARED ONLY WITH OTHERS INVOLVED IN THE ARRANGEMENT OR
PROVISION OF SERVICES TO THE APPLICANT PURSUANT TO WRITTEN CONSENT FROM
THE APPLICANT OR HIS OR HER AUTHORIZED REPRESENTATIVE. IF, BASED ON THE
ASSESSMENT, THE APPLICANT IS DETERMINED TO HAVE A NEED FOR OR IS
EXPECTED TO NEED ANY OF THE ITEMS OR SERVICES CONTAINED IN SUBDIVISION
FOUR OF THIS SECTION, SUCH APPLICANT SHALL BE DEEMED FUNCTIONALLY ELIGI-
BLE FOR THE PROGRAM.
(6) COUNSELING AND ASSISTANCE. THE AREA AGENCIES ON AGING SHALL
PROVIDE COUNSELING AND ASSISTANCE TO APPLICANTS WHO WISH TO OBTAIN A
REVERSE MORTGAGE LOAN FROM THE PROGRAM. COUNSELING AND ASSISTANCE SHALL
INCLUDE THE FOLLOWING:
(A) REVIEWING WITH THE APPLICANT THE TERMS AND RESTRICTIONS OF THE
LOAN, INCLUDING ASSISTING THE APPLICANT WITH DETERMINING WHETHER THE
LOAN WOULD JEOPARDIZE THE APPLICANT'S ELIGIBILITY FOR MEDICAID AND OTHER
MEANS-TESTED PROGRAMS;
(B) IDENTIFYING COMMUNITY BASED LONG-TERM CARE SERVICES, IN ACCORDANCE
WITH THE APPLICANT'S NEEDS AS DEMONSTRATED IN THE CARE NEEDS ASSESSMENT,
INCLUDING MEDICAL AND NON-MEDICAL IN-HOME SUPPORT PROGRAMS, AND PROVID-
ING INFORMATION ON HOW TO ACCESS THESE SERVICES, INCLUDING PROVIDER
DIRECTORIES, AND CASE MANAGEMENT SERVICES;
(C) EXPLORING WITH THE APPLICANT THE POSSIBILITY OF THE APPLICANT
BECOMING UNABLE TO MANAGE HIS OR HER FINANCES, AND IN THIS EVENT, HAVING
THE APPLICANT CONSIDER WHO HE OR SHE WOULD WANT TO MANAGE HIS OR HER
FINANCES, AND ADVISING THE APPLICANT OF THE NEED TO OBTAIN ESTATE PLAN-
NING COUNSELING AND PROPER LEGAL DOCUMENTATION IN ORDER TO EFFECTUATE
HIS OR HER WISHES UNDER THESE CIRCUMSTANCES; AND
(D) DISCUSSING WITH THE APPLICANT HIS OR HER WISHES REGARDING HOW
TITLE OF THE RESIDENCE SHOULD BE TRANSFERRED UPON THE DEATH OF THE
APPLICANT, AND ADVISING THE APPLICANT OF THE NEED TO OBTAIN ESTATE PLAN-
NING COUNSELING AND PROPER LEGAL DOCUMENTATION IN ORDER TO ENSURE THAT
HIS OR HER WISHES ARE CARRIED OUT.
(7) (A) PRIOR TO ACCEPTING A FINAL AND COMPLETE APPLICATION FOR A
REVERSE MORTGAGE THE LENDER SHALL PROVIDE THE BORROWER WITH A LIST OF
NOT FEWER THAN TEN COUNSELING AGENCIES THAT ARE APPROVED BY THE UNITED
A. 6987 4
STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT TO ENGAGE IN REVERSE
MORTGAGE COUNSELING AS PROVIDED IN SUBPART B OF PART 214 OF TITLE 24 OF
THE CODE OF FEDERAL REGULATIONS. THE COUNSELING AGENCY SHALL NOT RECEIVE
ANY COMPENSATION, EITHER DIRECTLY OR INDIRECTLY, FROM THE LENDER OR FROM
ANY OTHER PERSON OR ENTITY INVOLVED IN ORIGINATING OR SERVICING THE
MORTGAGE OR THE SALE OF ANNUITIES, INVESTMENTS, LONG-TERM CARE INSUR-
ANCE, OR ANY OTHER TYPE OF FINANCIAL OR INSURANCE PRODUCT. THIS SUBDIVI-
SION SHALL NOT PREVENT A COUNSELING AGENCY FROM RECEIVING FINANCIAL
ASSISTANCE THAT IS UNRELATED TO THE OFFERING OR SELLING OF A REVERSE
MORTGAGE LOAN AND THAT IS PROVIDED BY THE LENDER AS PART OF CHARITABLE
OR PHILANTHROPIC ACTIVITIES.
(B) A LENDER SHALL NOT ACCEPT A FINAL AND COMPLETE APPLICATION FOR A
REVERSE MORTGAGE LOAN FROM A PROSPECTIVE APPLICANT OR ASSESS ANY FEES
UPON A PROSPECTIVE APPLICANT WITHOUT FIRST RECEIVING CERTIFICATION FROM
THE APPLICANT OR THE APPLICANT'S AUTHORIZED REPRESENTATIVE THAT THE
APPLICANT HAS RECEIVED COUNSELING FROM AN AGENCY AS DESCRIBED IN PARA-
GRAPH (A) OF THIS SUBDIVISION AND THAT THE COUNSELING WAS CONDUCTED IN
PERSON, UNLESS THE CERTIFICATION SPECIFIES THAT THE APPLICANT ELECTED TO
RECEIVE THE COUNSELING IN A MANNER OTHER THAN IN PERSON. THE CERTIF-
ICATION SHALL BE SIGNED BY THE BORROWER AND THE AGENCY COUNSELOR, AND
SHALL INCLUDE THE DATE OF THE COUNSELING AND THE NAME, ADDRESS, AND
TELEPHONE NUMBER OF BOTH THE COUNSELOR AND THE APPLICANT. ELECTRONIC
FACSIMILE COPY OF THE HOUSING COUNSELING CERTIFICATION SATISFIES THE
REQUIREMENTS OF THIS SUBDIVISION. THE LENDER SHALL MAINTAIN THE CERTIF-
ICATION IN AN ACCURATE, REPRODUCIBLE, AND ACCESSIBLE FORMAT FOR THE TERM
OF THE REVERSE MORTGAGE.
(C) A LENDER SHALL NOT MAKE A REVERSE MORTGAGE LOAN WITHOUT FIRST
COMPLYING WITH, OR IN THE CASE OF BROKERED LOANS ENSURING COMPLIANCE
WITH, THE REQUIREMENTS OF THIS SUBDIVISION.
(8) OUTREACH BY THE PROGRAM. THE AGENCY SHALL ADVERTISE THE PROGRAM IN
A BROCHURE WHICH IT SHALL CREATE AND DISTRIBUTE TO EACH AREA OFFICE FOR
THE AGING. THE AGENCY SHALL PROVIDE THE BROCHURE TO EACH LOCAL SOCIAL
SERVICES DISTRICT TO DISTRIBUTE TO INDIVIDUALS WHO ARE APPLYING FOR
MEDICAID NURSING HOME OR HOME CARE SERVICES.
(9) REPORT. THE AGENCY SHALL ISSUE AN ANNUAL REPORT TO THE GOVERNOR,
THE TEMPORARY PRESIDENT OF THE SENATE AND THE SPEAKER OF THE ASSEMBLY.
SUCH REPORT SHALL CONTAIN, AT A MINIMUM, THE FOLLOWING INFORMATION: THE
NUMBER OF LOAN APPLICATIONS SUBMITTED TO THE PROGRAM, THE NUMBER OF LOAN
APPLICATIONS APPROVED AND THE NUMBER DENIED, THE REASONS FOR DENIAL, THE
NUMBER OF LOANS ISSUED BY THE PROGRAM, THE INCOMES AND AGES OF THE
BORROWERS, THE PURPOSE FOR WHICH A LOAN WAS ISSUED, ANY SUGGESTIONS FOR
IMPROVING OR EXPANDING THE PROGRAM, AND A DESCRIPTION OF THE PROGRAM'S
FUNDING SOURCES AND WHETHER THEY ARE ADEQUATE.
(10) RULEMAKING AUTHORITY. THE AGENCY SHALL ADOPT ALL PROCEDURAL AND
SUBSTANTIVE RULES AND REGULATIONS NECESSARY TO IMPLEMENT AND ADMINISTER
THE PROVISIONS OF THIS SECTION.
S 3. This act shall take effect on the one hundred eightieth day after
it shall have become a law.