S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   7589
 
                        2017-2018 Regular Sessions
 
                           I N  A S S E M B L Y
 
                                May 3, 2017
                                ___________
 
 Introduced  by M. of A. LUPARDO -- read once and referred to the Commit-
   tee on Judiciary
 
 AN ACT to amend the real property law,  in  relation  to  conditions  on
   lenders who extend reverse mortgages to persons over sixty and seventy
   years old
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Paragraphs (g), (h) and (i) of subdivision 2 of section 280
 of the real property law, as added by chapter 613 of the laws  of  1993,
 paragraph  (i) as further amended by section 104 of part A of chapter 62
 of the laws of 2011, are amended to read as follows:
   (g) an authorized lender must deliver to the applicant, upon  applica-
 tion[,  if available,] a PLAIN LANGUAGE statement prepared by the [local
 or county] DEPARTMENT OF FINANCIAL SERVICES WHO MAY CONSULT WITH THE NEW
 YORK STATE office for the aging, WHERE APPROPRIATE, on the  advisability
 and  availability of independent counseling and information services. IN
 ADDITION TO THE PLAIN LANGUAGE NOTICE, NO REVERSE MORTGAGE LOAN APPLICA-
 TION SHALL BE TAKEN BY A LENDER UNLESS THE LENDER PROVIDES THE  PROSPEC-
 TIVE  BORROWER,  PRIOR TO HIS OR HER MEETING WITH A COUNSELING AGENCY ON
 REVERSE MORTGAGES,  WITH  A  REVERSE  MORTGAGE  WORKSHEET  GUIDE  TO  BE
 PREPARED  BY  THE  DEPARTMENT OF FINANCIAL SERVICES WHO MAY CONSULT WITH
 THE NEW YORK STATE OFFICE FOR THE AGING WHERE APPROPRIATE.  Further,  no
 reverse  mortgage  commitment  shall  be  issued by an authorized lender
 until the applicant presents, in writing, a statement that the terms  of
 the  reverse mortgage loan have been explained by an attorney, a housing
 and urban  development  certified  counselor  or  any  other  counseling
 service  as  indicated on the statement supplied by the [county or local
 office for the aging] DEPARTMENT OF FINANCIAL SERVICES or a signed affi-
 davit indicating that the applicant, although made aware of  the  impor-
 tance  of counseling and its local availability through the provision of
 such information by the authorized lender, chooses not to utilize any of
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD07906-04-7

 A. 7589                             2
 
 the aforementioned available services.  THE LOAN APPLICATION  SHALL  NOT
 BE  APPROVED  UNTIL  THE  SIGNED  REVERSE  MORTGAGE  WORKSHEET  GUIDE IS
 PROVIDED TO THE LENDER. A COPY OF THE REVERSE MORTGAGE  WORKSHEET  GUIDE
 SHALL BE PROVIDED TO THE BORROWER THAT SHALL HAVE INFORMATION INCLUDING,
 BUT  NOT  LIMITED  TO: HOW REVERSE MORTGAGES CAN AFFECT THE BORROWER AND
 THEIR HEIRS AND ESTATE; THE CONSEQUENCES  OF  DEFAULTING  ON  A  REVERSE
 MORTGAGE;  ALTERNATIVES  TO  A  REVERSE  MORTGAGE; AND THE IMPACT ON THE
 BORROWER'S ELIGIBILITY FOR GOVERNMENT ASSISTANCE PROGRAMS. The  form  of
 such  statement  and  affidavit  shall be developed by the DEPARTMENT OF
 FINANCIAL SERVICES, WHO MAY CONSULT WITH THE New York state  office  for
 the aging WHERE APPROPRIATE; and
   (h)  A  LENDER  SHALL  NOT ACCEPT A FINAL AND COMPLETE APPLICATION FOR
 REVERSE MORTGAGE LOAN FROM A PROSPECTIVE APPLICANT OR  ASSESS  ANY  FEES
 UPON  A  PROSPECTIVE APPLICANT UNTIL A LAPSE OF SEVEN DAYS FROM THE DATE
 OF COUNSELING, AS EVIDENCED BY THE COUNSELING CERTIFICATION, AND 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 PARAGRAPH  (G)  OF  THIS  SUBDIVISION  OR
 SEVEN  DAYS  FROM  RECEIPT  OF A SIGNED AFFIDAVIT EXPRESSLY WAIVING SUCH
 COUNSELING; AND
   (I) any such reverse mortgage shall expressly and conspicuously bear a
 legend identifying it as such; and
   [(i)] (J) subject to such rules or regulations as  the  superintendent
 of  financial  services may adopt, a reverse mortgage loan shall be made
 at either a fixed or variable rate of interest.
   § 2. Paragraphs (j), (k), (l) and (m)  of  subdivision  2  of  section
 280-a  of  the real property law, as added by chapter 613 of the laws of
 1993, paragraph (l) as further amended by section 104 of part A of chap-
 ter 62 of the laws of 2011, are amended to read as follows:
   (j) an authorized lender must deliver to the applicant  upon  applica-
 tion[,  if available,] a PLAIN LANGUAGE statement prepared by the [local
 or county] DEPARTMENT OF FINANCIAL SERVICES, WHO MAY  CONSULT  WITH  THE
 NEW  YORK  STATE  office for the aging, WHERE APPROPRIATE, on the advis-
 ability and  availability  of  independent  counseling  and  information
 services.  IN ADDITION TO THE PLAIN LANGUAGE NOTICE, NO REVERSE MORTGAGE
 LOAN APPLICATION SHALL BE TAKEN BY A LENDER UNLESS THE  LENDER  PROVIDES
 THE  PROSPECTIVE BORROWER, PRIOR TO HIS OR HER MEETING WITH A COUNSELING
 AGENCY ON REVERSE MORTGAGES, WITH A REVERSE MORTGAGE WORKSHEET GUIDE  TO
 BE  PREPARED  BY  THE  DEPARTMENT OF FINANCIAL SERVICES, WHO MAY CONSULT
 WITH THE NEW YORK STATE OFFICE FOR THE AGING WHERE APPROPRIATE. Further,
 no reverse mortgage commitment shall be issued by the authorized  lender
 until  the applicant presents, in writing, a statement that the terms of
 the reverse mortgage loan have been explained to them by an attorney,  a
 housing  and  urban  development  certified counselor or any other coun-
 seling service as indicated on the statement supplied by the [county  or
 local office for the aging] DEPARTMENT OF FINANCIAL SERVICES or a signed
 affidavit  indicating  that  the  applicant,  although made aware of the
 importance  of  counseling  and  its  local  availability  through   the
 provision  of  such information by the authorized lender, chooses not to
 utilize any of the aforementioned available services.  THE LOAN APPLICA-
 TION SHALL NOT BE APPROVED UNTIL THE SIGNED REVERSE  MORTGAGE  WORKSHEET
 GUIDE  IS  PROVIDED  TO THE LENDER. A COPY OF THE REVERSE MORTGAGE WORK-
 SHEET GUIDE SHALL BE PROVIDED TO THE BORROWER THAT SHALL  HAVE  INFORMA-
 TION  INCLUDING,  BUT  NOT LIMITED TO:  HOW REVERSE MORTGAGES CAN AFFECT
 THE BORROWER AND THEIR HEIRS AND ESTATE, THE CONSEQUENCES OF  DEFAULTING
 ON  A  REVERSE MORTGAGE, ALTERNATIVES TO A REVERSE MORTGAGE, AND IMPACTS

 A. 7589                             3
 
 ON THE BORROWER'S ELIGIBILITY FOR GOVERNMENTAL ASSISTANCE PROGRAMS.  The
 form  of  such statement and affidavit shall be developed by the DEPART-
 MENT OF FINANCIAL SERVICES, WHO MAY CONSULT  WITH  THE  New  York  state
 office for the aging WHERE APPROPRIATE; and
   (k)  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 UNTIL A LAPSE OF SEVEN DAYS FROM THE DATE
 OF COUNSELING, AS EVIDENCED BY THE COUNSELING CERTIFICATION, AND 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 PARAGRAPH  (J)  OF  THIS  SUBDIVISION  OR
 SEVEN  DAYS  FROM  RECEIPT  OF A SIGNED AFFIDAVIT EXPRESSLY WAIVING SUCH
 COUNSELING; AND
   (L) a reverse mortgage pursuant to this section  shall  expressly  and
 conspicuously bear a legend identifying it as such; and
   [(l)]  (M)  subject to such rules or regulations as the superintendent
 of financial services may adopt, a reverse mortgage loan shall  be  made
 at either a fixed or variable rate of interest; and
   [(m)]  (N)  in  the  event  that an authorized lender or holder of the
 reverse mortgage loan intends to initiate  foreclosure  proceedings  the
 mortgagor  shall  have the right to designate a third party who shall be
 notified.  In the event that the mortgagor has not  designated  a  third
 party  to receive such notice of foreclosure, then the authorized lender
 or the holder of said reverse mortgage loan shall notify  the  local  or
 county  office  for  the  aging  of  its  intent to commence foreclosure
 proceedings.  Such entity shall take appropriate action to  protect  the
 interests of the mortgagor.
   § 3. This act shall take effect on the one hundred twentieth day after
 it shall have become a law.