S T A T E O F N E W Y O R K
________________________________________________________________________
8888
I N S E N A T E
June 1, 2018
___________
Introduced by Sen. KLEIN -- read twice and ordered printed, and when
printed to be committed to the Committee on Banks
AN ACT to amend the banking law, the uniform commercial code and the
civil practice law and rules, in relation to reverse cooperative
apartment unit loans
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. The banking law is amended by adding a new section 6-n to
read as follows:
§ 6-N. REVERSE COOPERATIVE APARTMENT UNIT LOANS FOR PERSONS SEVENTY
YEARS OF AGE OR OLDER. 1. FOR PURPOSES OF THIS SECTION, THE FOLLOWING
TERMS SHALL HAVE THE FOLLOWING MEANINGS:
(A) REVERSE COOPERATIVE APARTMENT UNIT LOAN. A LOAN WHICH IS SECURED
BY AN INTEREST IN A COOPERATIVE APARTMENT THAT IS THE RESIDENCE OF THE
BORROWER(S) THE PROCEEDS OF WHICH ARE ADVANCED TO THE BORROWER(S) DURING
THE TERM OF THE LOAN IN EQUAL INSTALLMENTS, OR IN ADVANCES THROUGH A
LINE OF CREDIT OR OTHERWISE, IN LUMP SUMS, OR THROUGH A COMBINATION
THEREOF.
(B) TERM REVERSE COOPERATIVE APARTMENT UNIT LOAN. AS USED IN THIS
SECTION, ANY REVERSE COOPERATIVE APARTMENT UNIT LOAN THAT HAS A FIXED
TERM FOR PAYMENTS TO THE BORROWER(S).
(C) TENURE COOPERATIVE APARTMENT UNIT LOAN. AS USED IN THIS SECTION,
ANY COOPERATIVE APARTMENT UNIT LOAN THAT DOES NOT HAVE A FIXED TERM FOR
PAYMENTS TO THE BORROWER(S).
(D) AUTHORIZED LENDER. ANY BANK, TRUST COMPANY, NATIONAL BANKING ASSO-
CIATION, SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION, FEDERAL SAVINGS
BANK, FEDERAL SAVINGS AND LOAN ASSOCIATION, CREDIT UNION, OR FEDERAL
CREDIT UNION OR ANY LICENSED MORTGAGE BANKER APPROVED FOR THE MAKING OF
REVERSE MORTGAGE LOANS BY THE SUPERINTENDENT OR ANY ENTITY EXEMPTED FROM
LICENSING PURSUANT TO SECTION FIVE HUNDRED NINETY OF THIS CHAPTER AND
APPROVED FOR THE MAKING OF REVERSE MORTGAGE LOANS BY THE SUPERINTENDENT.
(E) BORROWER. A TENANT IN SEVERALTY WHO IS SEVENTY YEARS OF AGE OR
OLDER, OR IF THE COOPERATIVE APARTMENT UNIT IS HELD BY TENANTS BY THE
ENTIRETY OR BY JOINT TENANCY, THE YOUNGEST OF WHICH IS SEVENTY YEARS OF
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD15245-03-8
S. 8888 2
AGE OR OLDER AND WHOSE INCOME DOES NOT EXCEED EIGHTY PERCENT OF THE
MEDIAN INCOME OF THE COUNTY IN WHICH HE OR SHE RESIDES.
(F) SUPERINTENDENT. THE SUPERINTENDENT ESTABLISHED PURSUANT TO SECTION
TWO HUNDRED TWO OF THE FINANCIAL SERVICES LAW.
2. A COOPERATIVE APARTMENT UNIT LOAN PURSUANT TO THIS SECTION SHALL BE
SUBJECT TO THE FOLLOWING:
(A) THE BORROWER SHALL BE GRANTED LIFETIME POSSESSION OF THE SUBJECT
PREMISES OF THE COOPERATIVE APARTMENT UNIT WHICH IS THE SECURITY FOR THE
REVERSE COOPERATIVE APARTMENT UNIT LOAN, AS LONG AS SUCH APARTMENT UNIT
REMAINS THE BORROWERS' PRINCIPAL RESIDENCE AND SUBJECT TO A LIMITED
WAIVER OF THE RIGHT OF FORECLOSURE AS DETERMINED BY THE SUPERINTENDENT;
AND
(B) THE TERM OF THE REVERSE COOPERATIVE APARTMENT UNIT LOAN, EXCEPT
FOR A TENURE REVERSE COOPERATIVE APARTMENT UNIT LOAN, SHALL BE FOR A
PERIOD OF TEN YEARS OR LESS; AND
(C) THE LOAN TO VALUE RATIO SHALL BE DETERMINED BY THE SUPERINTENDENT;
AND
(D) SUBJECT TO SUCH RULES OR REGULATIONS AS THE SUPERINTENDENT SHALL
ADOPT, FOR THAT PERIOD OF TIME COMMENCING AT THE END OF THE LOAN TERM OR
TEN YEARS AFTER THE REVERSE COOPERATIVE APARTMENT UNIT LOAN COMMENCES,
WHICHEVER OCCURS FIRST, AND ENDING AT SUCH TIME AS THE REVERSE COOPER-
ATIVE APARTMENT UNIT LOAN IS PAID IN FULL, THE AUTHORIZED LENDER, AT ITS
OPTION, MAY RECEIVE NO MORE THAN TWENTY PERCENT OF THE FUTURE APPRECI-
ATION OF THE PROPERTY SECURING THE REVERSE COOPERATIVE APARTMENT UNIT
LOAN AS FULL OR PARTIAL CONSIDERATION FOR THE MAKING OF A REVERSE COOP-
ERATIVE APARTMENT UNIT LOAN; PROVIDED, HOWEVER, THAT SUCH FUTURE APPRE-
CIATION SHALL BE LIMITED BY SUCH RULES AND REGULATIONS AS THE SUPER-
INTENDENT MAY ADOPT OR THE AUTHORIZED LENDER MAY CHARGE A FIXED RATE OF
INTEREST ON THE OUTSTANDING BALANCE OF MONIES ADVANCED UNDER THE REVERSE
MORTGAGE AGREEMENT OR ANY COMBINATION THEREOF. SAID REVERSE COOPERATIVE
APARTMENT UNIT LOAN SHALL NOT COME DUE AND SHALL BE EXTENDED UNTIL THE
VOLUNTARY RELINQUISHMENT BY THE BORROWERS OF POSSESSORY INTEREST IN SUCH
COOPERATIVE APARTMENT UNIT, THE APARTMENT UNIT NO LONGER BEING THE
BORROWERS' PRINCIPAL RESIDENCE, THE DEATH OF THE BORROWERS, OR SUCH
OTHER EVENTS AS MAY BE DETERMINED BY THE SUPERINTENDENT. ANY SUCH APPRE-
CIATION SHALL NOT BE CONSIDERED INTEREST FOR THE PURPOSES OF ANY LAW
REGULATING THE MAXIMUM RATE OF INTEREST WHICH MAY BE CHARGED, TAKEN OR
RECEIVED INCLUDING SECTIONS 190.40 AND 190.42 OF THE PENAL LAW; AND
(E) THE AUTHORIZED LENDER SHALL MAINTAIN AN ESCROW ACCOUNT FOR THE
PURPOSES OF PAYING REAL PROPERTY TAXES, INSURANCE PREMIUMS OF THE PROP-
ERTY SECURING THE REVERSE COOPERATIVE APARTMENT UNIT LOAN, OR FOR THE
PAYMENT OF ANY OTHER FEES AND EXPENSES AS MAY BE PERMITTED BY THE SUPER-
INTENDENT REGULATION; AND
(F) SUBJECT TO SUCH RULES OR REGULATIONS AS THE SUPERINTENDENT MAY
ADOPT, AN AUTHORIZED LENDER OR ANY SUCCESSOR OR ASSIGN OF SUCH AUTHOR-
IZED LENDER WHICH MAY SUSPENDS, CEASES OR MAKES LATE PAYMENTS TO A
BORROWER UNDER A REVERSE COOPERATIVE APARTMENT UNIT LOAN SHALL BE
SUBJECT TO FORFEITURE (AS LIQUIDATED DAMAGES TO SUCH BORROWER AND NOT AS
A PENALTY) OF TWICE THE INTEREST WHICH WOULD OTHERWISE HAVE BEEN EARNED
DURING THE PERIOD IN WHICH PAYMENTS WERE SUSPENDED, CEASED, OR MADE
LATE, PROVIDED THAT SAID AUTHORIZED LENDER OR ANY SUCCESSOR OR ASSIGN OF
SUCH AUTHORIZED LENDER SHALL HAVE THE RIGHT TO MAKE PAYMENTS PURSUANT TO
SAID LOAN AGREEMENT WITHIN FIFTEEN DAYS OF EACH PAYMENT DATE WITHOUT
PENALTY; AND
(G) AN AUTHORIZED LENDER MUST DELIVER TO AN APPLICANT SUCH DISCLOSURES
AS MAY BE REQUIRED BY THE SUPERINTENDENT WHICH SHALL DESCRIBE THE RELE-
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VANT PORTIONS OF THE REVERSE LOAN BEING OFFERED, AND SHALL INCLUDE BUT
NOT BE LIMITED TO THE FOLLOWING ITEMS:
(I) EXCEPT FOR A TENURE COOPERATIVE APARTMENT UNIT LOAN, A SCHEDULE OF
PAYMENTS TO AND FROM THE BORROWER AND THE TOTAL PAYMENTS IN DOLLARS OVER
THE TERM OF THE REVERSE COOPERATIVE APARTMENT UNIT LOAN FOR BOTH THE
BORROWER AND LENDER, DEPENDING ON THE TYPE OF REVERSE COOPERATIVE APART-
MENT UNIT LOAN BEING OFFERED;
(II) A STATEMENT PROMINENTLY DISPLAYED ADVISING APPLICANTS TO CONSULT
WITH APPROPRIATE AUTHORITIES REGARDING TAX AND ESTATE PLANNING CONSE-
QUENCES OF A REVERSE COOPERATIVE APARTMENT UNIT LOAN;
(III) WHERE APPLICABLE A DESCRIPTION OF PREPAYMENT AND REFINANCING
FEATURES;
(IV) TO THE EXTENT DETERMINABLE AT OR PRIOR TO THE INCEPTION OF THE
REVERSE COOPERATIVE APARTMENT UNIT LOAN, THE INTEREST RATE AND, EXCEPT
FOR A TENURE REVERSE COOPERATIVE APARTMENT UNIT LOAN, THE TOTAL INTEREST
PAYABLE ON THE REVERSE COOPERATIVE APARTMENT UNIT LOAN;
(V) A STATEMENT CONCERNING THE COMPLIANCE OF THE LENDER WITH THE
CRITERIA ESTABLISHED BY THE SUPERINTENDENT THAT AN AUTHORIZED LENDER
MUST MEET BEFORE IT MAY MAKE REVERSE COOPERATIVE APARTMENT UNIT LOANS
PURSUANT TO THIS SECTION;
(VI) A STATEMENT SETTING FORTH THOSE EVENTS WHICH WOULD TERMINATE THE
REVERSE COOPERATIVE APARTMENT UNIT LOAN;
(VII) THE LOAN IS SUBJECT TO A THREE DAY RIGHT OF RESCISSION BY THE
BORROWER; AND
(VIII) A FINANCIAL STATEMENT SETTING FORTH AN ESTIMATE OF ALL COSTS
ASSOCIATED WITH THE LOAN; AND
(H) THE OUTSTANDING BALANCE MAY BE PREPAID IN FULL BY THE BORROWER
WITHOUT PENALTY AT ANY TIME DURING THE REVERSE COOPERATIVE APARTMENT
UNIT LOAN TERM; AND
(I) AN AUTHORIZED LENDER IS PROHIBITED FROM USING OR ATTACHING ANY
PROPERTY OR ASSET OF THE BORROWER EXCEPT THE APARTMENT UNIT SECURING THE
REVERSE COOPERATIVE APARTMENT UNIT LOAN IN SETTLEMENT OF A REVERSE LOAN
OBLIGATION; AND
(J) AN AUTHORIZED LENDER MUST DELIVER TO THE APPLICANT UPON APPLICA-
TION, A STATEMENT PREPARED BY THE LOCAL OR COUNTY OFFICE FOR THE AGING
ON THE ADVISABILITY AND AVAILABILITY OF INDEPENDENT COUNSELING AND
INFORMATION SERVICES. FURTHER, NO REVERSE LOAN COMMITMENT SHALL BE
ISSUED BY THE AUTHORIZED LENDER UNTIL THE APPLICANT PRESENTS, IN WRIT-
ING, A STATEMENT THAT THE TERMS OF THE REVERSE COOPERATIVE APARTMENT
UNIT LOAN HAVE BEEN EXPLAINED TO THEM 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. THE FORM OF SUCH STATEMENT AND AFFIDAVIT SHALL BE DEVELOPED
BY THE NEW YORK STATE OFFICE FOR THE AGING; AND
(K) A REVERSE COOPERATIVE APARTMENT UNIT LOAN PURSUANT TO THIS SECTION
SHALL EXPRESSLY AND CONSPICUOUSLY BEAR A LEGEND IDENTIFYING IT AS SUCH;
AND
(L) SUBJECT TO SUCH RULES OR REGULATIONS AS THE SUPERINTENDENT MAY
ADOPT, A REVERSE COOPERATIVE APARTMENT UNIT LOAN SHALL BE MADE AT EITHER
A FIXED OR VARIABLE RATE OF INTEREST; AND
(M) IN THE EVENT THAT AN AUTHORIZED LENDER OR HOLDER OF THE REVERSE
COOPERATIVE APARTMENT UNIT LOAN INTENDS TO INITIATE FORECLOSURE
PROCEEDINGS THE BORROWER SHALL HAVE THE RIGHT TO DESIGNATE A THIRD PARTY
WHO SHALL BE NOTIFIED. IN THE EVENT THAT THE MORTGAGOR HAS NOT DESIG-
NATED A THIRD PARTY TO RECEIVE SUCH NOTICE OF FORECLOSURE, THEN THE
AUTHORIZED LENDER OR THE HOLDER OF SAID REVERSE COOPERATIVE APARTMENT
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UNIT 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 BORROWER; AND
(N) REVERSE COOPERATIVE APARTMENT UNIT LOANS SHALL BE ALSO SUBJECT TO
ANY ELIGIBLE NON-BORROWING SPOUSE BEING PROVIDED WITH A DEFERRAL OF THE
DUE AND PAYABLE STATUS OF THE LOAN UPON THE DEATH OF THE LAST SURVIVING
BORROWER, BUT ONLY FOR A PERIOD OF TIME DURING WHICH AND SUBJECT TO THE
NON-BORROWING SPOUSE AGREEING TO EXECUTE DOCUMENTATION TO PRESERVE THE
LENDER'S LIEN, IF REQUESTED TO DO SO; AND
(O) A REVERSE COOPERATIVE APARTMENT UNIT LOAN SECURED BY A UNIT IN A
COOPERATIVE HOUSING DEVELOPMENT SHALL ALSO BE SUBJECT TO THE PRIOR
APPROVAL BY THE COOPERATIVE HOUSING ASSOCIATION'S BOARD OF DIRECTORS.
3. A REVERSE COOPERATIVE APARTMENT UNIT LOAN PURSUANT TO THIS SECTION
MAY:
(A) PROVIDE THAT AN AUTHORIZED LENDER MAY, CONSISTENT WITH FEDERAL
LAWS AND REGULATIONS, INCLUDE A DUE-ON-SALE CLAUSE IN ITS REVERSE COOP-
ERATIVE APARTMENT UNIT LOAN AGREEMENT AND AT ITS OPTION EXERCISE AND
ENFORCE SUCH CLAUSE IN ACCORDANCE WITH ITS TERMS; AND
(B) PROVIDE THAT THE BORROWER'S CLOSING COSTS, INCLUDING BUT NOT
LIMITED TO LOAN OR COMMITMENT FEES IF ANY, INSURANCE PREMIUMS, REPAIRS,
LEGAL FEES, THE COSTS OF ANNUITIES, THE COSTS OF THIRD PARTY COUNSELING,
THE COSTS OF EXISTING MORTGAGES OR LIENS, AND OTHER APPROPRIATE COSTS BE
INCLUDED IN THE PRINCIPAL OF THE REVERSE COOPERATIVE APARTMENT UNIT LOAN
AND DISBURSED OUT OF THE LOAN PROCEEDS AT CLOSING.
4. THE SUPERINTENDENT SHALL ADOPT THOSE RULES OR REGULATIONS AS IT
CONSIDERS APPROPRIATE TO GOVERN REVERSE COOPERATIVE APARTMENT UNIT LOAN
MADE PURSUANT TO THIS SECTION. NO REVERSE COOPERATIVE APARTMENT UNIT
LOAN SHALL BE MADE UNLESS IT CONFORMS TO THE REQUIREMENTS OF THIS
SECTION AND SUCH RULES AND REGULATIONS AS THE SUPERINTENDENT MAY ADOPT.
A REVERSE COOPERATIVE APARTMENT UNIT LOAN MAY BE MADE BY ANY AUTHORIZED
LENDER, NATIONAL BANKING ASSOCIATION, FEDERAL SAVINGS AND LOAN ASSOCI-
ATION OR FEDERAL CREDIT UNION IN CONFORMITY WITH RULES OR REGULATIONS
WHICH SHALL INCLUDE, BUT ARE NOT LIMITED TO:
(A) ANY LIMITATIONS ON THE TAKING OF A PERCENTAGE OF THE FUTURE APPRE-
CIATION OF THE UNIT SECURING THE REVERSE COOPERATIVE APARTMENT UNIT LOAN
AS CONSIDERATION FOR MAKING THE REVERSE LOAN;
(B) THE EXECUTION BY AN AUTHORIZED LENDER OF A LIMITED WAIVER OF THE
RIGHT OF FORECLOSURE;
(C) WITH THE EXCEPTION OF THE COUNSELING STATEMENT PREPARED BY THE NEW
YORK STATE OFFICE FOR THE AGING PURSUANT TO PARAGRAPH (J) OF SUBDIVISION
TWO OF THIS SECTION, THE FORM AND CONTENTS OF ANY DISCLOSURE STATEMENT
THAT AUTHORIZED LENDERS MUST PROVIDE TO BORROWERS;
(D) AN INITIAL DISTRIBUTION LIMIT OF SIXTY PERCENT OF THE PRINCIPAL IN
THE FIRST YEAR OF THE LOAN; AND
(E) NET PRINCIPAL LIMITS, AS ESTABLISHED BY THE SUPERINTENDENT TAKING
INTO CONSIDERATION THE FOLLOWING FACTORS: THE BORROWER'S AGE AT THE TIME
OF THE LOAN; ORIGINATION COSTS; CLOSING COSTS INCLUDING, BUT NOT LIMITED
TO MORTGAGE INSURANCE PREMIUM, TITLE INSURANCE AND HOME INSPECTION FEES;
AND AMOUNTS SET-ASIDE FOR HOME REPAIRS THAT ARE A REQUIREMENT OF RECEIV-
ING THE LOAN.
5. NOTWITHSTANDING ANY INCONSISTENT PROVISION OF LAW, THE PRIORITY OF
THE LIEN OF A REVERSE COOPERATIVE APARTMENT UNIT LOAN, INCLUDING THE
LIEN FOR ALL PRINCIPAL, INTEREST, FEES, COSTS, SHARED APPRECIATION AND
OTHER CHARGES ASSESSED IN CONNECTION WITH THE REVERSE LOAN, SHALL DATE
FROM THE RECORDING OF THE LOAN IRRESPECTIVE OF THE DATE OF ANY ADVANCE
OF REVERSE LOAN PROCEEDS OR THE DATE BY WHICH AN AUTHORIZED LENDER SHALL
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BE ENTITLED TO SHARED APPRECIATION OR ACCRUED BUT UNPAID INTEREST, FEES,
COSTS OR OTHER CHARGES.
6. NOTHING IN THIS SECTION SHALL BE CONSTRUED TO LIMIT, IMPAIR OR
OTHERWISE AFFECT THE PRIORITY, UNDER APPLICABLE LAW, OF ANY OTHER MORT-
GAGE, DEED OF TRUST, ENCUMBRANCE OR LIEN WHICH WAS RECORDED OR FILED
PRIOR TO THE EFFECTIVE DATE OF THIS SECTION.
7. THE SALE OR TRANSFER OF THE INTEREST IN THE COOPERATIVE APARTMENT
UNIT SECURING THE REVERSE LOAN TO A PERSON OTHER THAN AN ORIGINAL
BORROWER OR BORROWERS SHALL RESULT IN THE TERMINATION OF THE REVERSE
LOAN.
8. IN A TERM REVERSE COOPERATIVE APARTMENT UNIT LOAN, THE APARTMENT
UNIT SECURING THE REVERSE LOAN MAY BE REAPPRAISED BY AN INDEPENDENT
APPRAISER AT THE END OF THE LOAN TERM. IF THE VALUE OF THE UNIT HAS
APPRECIATED, THE TERM OF THE REVERSE LOAN MAY BE EXTENDED OR REFINANCED;
HOWEVER THE TOTAL REVERSE LOAN AMOUNT MAY NOT EXCEED SUCH AMOUNT OR LOAN
TO VALUE RATIO AS MAY BE DETERMINED BY THE SUPERINTENDENT. THE REFINANC-
ING OF THE REVERSE COOPERATIVE APARTMENT UNIT LOAN SHALL BE PROVIDED BY
THE ORIGINAL AUTHORIZED LENDER OR BY ANY OTHER AUTHORIZED LENDER.
9. THE PRINCIPAL, INCLUDING ANY ACCRUED BUT UNPAID INTEREST, OF A
REVERSE COOPERATIVE APARTMENT UNIT LOAN AGREEMENT ENTERED INTO PURSUANT
TO THIS SECTION MUST BE INSURED BY THE BORROWER. IF SUCH INSURANCE IS
PURCHASED FROM OR OTHERWISE PROVIDED BY ANY AGENCY OF THE STATE OF NEW
YORK, THE BORROWER SHALL BE GRANTED THE RIGHT, FOR A TERM COOPERATIVE
APARTMENT UNIT LOAN, TO REFINANCE OR EXTEND THE REVERSE COOPERATIVE
APARTMENT UNIT LOAN AT THE END OF THE TERM, SUBJECT TO SUCH RULES AND
REGULATIONS AS THE SUPERINTENDENT MAY ADOPT. THE AUTHORIZED LENDER SHALL
HAVE THE OPTION TO CHOOSE BETWEEN REFINANCING OR EXTENDING THE REVERSE
MORTGAGE LOAN. SUBJECT TO OBTAINING AN ADEQUATE INCREASE IN THE INSUR-
ANCE AND SUBJECT TO SUCH RULES AND REGULATIONS AS THE SUPERINTENDENT MAY
ADOPT, THE TOTAL REVERSE COOPERATIVE APARTMENT UNIT LOAN AMOUNT SHALL
NOT EXCEED SUCH AMOUNT OR RATIO AS MAY BE DETERMINED BY THE SUPERINTEN-
DENT. THE REFINANCING OF THE REVERSE COOPERATIVE APARTMENT UNIT LOAN
SHALL BE PROVIDED BY THE ORIGINAL AUTHORIZED LENDER OR BY ANY OTHER
AUTHORIZED LENDER.
§ 2. Subsection (f) of section 9-611 of the uniform commercial code is
amended by adding a new paragraph 1-a to read as follows:
(1-A) NOTWITHSTANDING ANY OTHER PROVISION OF LAW, WITH REGARD TO A
REVERSE COOPERATIVE APARTMENT UNIT LOAN, AT LEAST NINETY DAYS BEFORE A
LENDER, AN ASSIGNEE OR A LOAN SERVICER COMMENCES LEGAL ACTION AGAINST
THE BORROWER OR BORROWERS AT THE PROPERTY ADDRESS AND ANY OTHER
ADDRESSES OF RECORD, INCLUDING REVERSE COOPERATIVE APARTMENT UNIT LOAN
FORECLOSURE, SUCH LENDER, ASSIGNEE OR LOAN SERVICER SHALL GIVE NOTICE TO
THE BORROWER IN AT LEAST FOURTEEN-POINT TYPE EXCEPT FOR THE HEADING
WHICH SHALL BE IN AT LEAST SIXTEEN-POINT TYPE WHICH SHALL INCLUDE THE
FOLLOWING:
YOU COULD LOSE YOUR COOPERATIVE APARTMENT UNIT TO FORECLOSURE.
PLEASE READ THE FOLLOWING NOTICE CAREFULLY.
DATE
BORROWER'S ADDRESS
LOAN NUMBER:
PROPERTY ADDRESS:
DEAR BORROWER(S):
AS OF ___________, WE AS YOUR LENDER OR SERVICER CLAIM THAT YOUR REVERSE
COOPERATIVE APARTMENT UNIT LOAN IS ___ DAYS IN DEFAULT. UNDER NEW YORK
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STATE LAW, WE ARE REQUIRED TO SEND YOU THIS NOTICE TO INFORM YOU THAT
YOU MAY BE AT RISK OF LOSING YOUR HOME.
WE, THE LENDER OR SERVICER OF YOUR LOAN, ARE CLAIMING THAT YOUR REVERSE
LOAN IS IN DEFAULT BECAUSE YOU HAVE NOT COMPLIED WITH THE FOLLOWING
CONDITIONS OF YOUR LOAN:
_____ YOU ARE NOT OCCUPYING YOUR COOPERATIVE APARTMENT UNIT AS YOUR
PRINCIPAL RESIDENCE
_____ YOU DID NOT SUBMIT THE REQUIRED ANNUAL CERTIFICATE OF OCCUPANCY
_____ THE NAMED BORROWER ON THE REVERSE LOAN HAS DIED
_____ YOU DID NOT MAINTAIN HOMEOWNER'S INSURANCE
{SERVICER NAME} PURCHASED HOMEOWNER'S INSURANCE FOR YOU ON THE
FOLLOWING DATE(S) AND FOR THE FOLLOWING COST(S):
____________________________________
_____ YOU DID NOT PAY WATER/SEWER CHARGES
{SERVICER NAME} PAID WATER/SEWER CHARGES FOR YOU ON THE
FOLLOWING DATE(S) AND FOR THE FOLLOWING COST(S):
________________________
_____ YOU DID NOT MAKE REQUIRED REPAIRS TO YOUR UNIT
IF THE CLAIM IS BASED ON YOUR FAILURE TO PAY PROPERTY OR WATER AND SEWER
CHARGES OR MAINTAIN HOMEOWNER'S INSURANCE, YOU CAN CURE THIS DEFAULT BY
MAKING THE PAYMENT OF $____________ FOR THE ADVANCEMENTS WE MADE TOWARDS
THESE PAYMENTS ON YOUR BEHALF.
YOU HAVE THE RIGHT TO DISPUTE THE CLAIMS LISTED ABOVE BY CONTACTING US,
BY CALLING ___________ OR SENDING A LETTER TO __________________. THIS
MAY INCLUDE PROOF OF PAYMENTS MADE FOR WATER AND SEWER CHARGES OR A
CURRENT DECLARATION PAGE FROM YOUR INSURANCE COMPANY, OR ANY OTHER PROOF
TO DISPUTE THE SERVICER'S CLAIM.
IF YOU ARE IN DEFAULT FOR FAILURE TO PAY PROPERTY CHARGES (HOMEOWNER'S
INSURANCE AND/OR WATER/SEWER CHARGES) YOU MAY QUALIFY FOR A GRANT, LOAN,
OR RE-PAYMENT PLAN TO CURE THE DEFAULT BALANCE OWED.
IF YOU ARE IN DEFAULT DUE TO THE DEATH OF YOUR SPOUSE, YOU MAY BE
CONSIDERED AN ELIGIBLE "NON-BORROWING SPOUSE" WHICH ALLOWS YOU TO REMAIN
IN YOUR HOME FOR THE REST OF YOUR LIFE.
IF YOU ARE OVER THE AGE OF 80 AND HAVE A LONG TERM ILLNESS, YOU MAY ALSO
QUALIFY FOR THE "AT-RISK EXTENSION," WHICH ALLOWS YOU TO REMAIN IN YOUR
UNIT FOR ONE ADDITIONAL YEAR AND REQUIRES AN ANNUAL RE-CERTIFICATION.
IF YOU ARE IN DEFAULT BECAUSE THE NAMED BORROWER ON THE REVERSE LOAN HAS
DIED AND YOU ARE THE LAWFUL HEIR TO THE PROPERTY, YOU MAY BE ABLE TO
KEEP THE PROPERTY BY PAYING EITHER THE FULL LOAN BALANCE OR 95 PERCENT
OF THE UNIT'S APPRAISED VALUE, WHICHEVER IS LESS.
ATTACHED TO THIS NOTICE IS A LIST OF GOVERNMENT-APPROVED HOUSING COUN-
SELING AGENCIES AND LEGAL SERVICES IN YOUR AREA WHICH PROVIDE FREE COUN-
SELING. YOU CAN ALSO CALL THE NYS OFFICE OF THE ATTORNEY GENERAL'S HOME-
OWNER PROTECTION PROGRAM (HOPP) TOLL-FREE CONSUMER HOTLINE TO BE
CONNECTED TO FREE HOUSING COUNSELING SERVICES IN YOUR AREA AT
1-855-HOME-456 (1-855-466-3456), OR VISIT THEIR WEBSITE AT
HTTP://WWW.AGHOMEHELP.COM. A STATEWIDE LISTING BY COUNTY IS ALSO AVAIL-
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ABLE AT HTTP://WWW.DFS.NY.GOV/CONSUMER/MORTG NYS NP COUNSELING AGEN-
CIES.HTM. YOU MAY ALSO CALL YOUR LOCAL DEPARTMENT OF AGING FOR A REFER-
RAL OR CALL 311 IF YOU LIVE IN NEW YORK CITY.
QUALIFIED FREE HELP IS AVAILABLE; WATCH OUT FOR COMPANIES OR PEOPLE WHO
CHARGE A FEE FOR THESE SERVICES.
YOU MAY ALSO CONTACT US DIRECTLY AT __________ AND ASK TO DISCUSS ALL
POSSIBLE OPTIONS TO ALLOW YOU TO CURE YOUR DEFAULT AND PREVENT THE FORE-
CLOSURE OF YOUR HOME. WHILE WE CANNOT ENSURE THAT A RESOLUTION IS
POSSIBLE, WE ENCOURAGE YOU TO TAKE IMMEDIATE STEPS TO TRY TO ACHIEVE A
RESOLUTION. THE LONGER YOU WAIT, THE FEWER OPTIONS YOU MAY HAVE.
IF YOU HAVE NOT TAKEN ANY ACTIONS TO RESOLVE THIS MATTER WITHIN NINETY
DAYS FROM THE DATE THIS NOTICE WAS MAILED, WE MAY COMMENCE LEGAL ACTION
AGAINST YOU (OR SOONER IF YOU CEASE TO LIVE IN THE DWELLING AS YOUR
PRIMARY RESIDENCE).
IF YOU NEED FURTHER INFORMATION, PLEASE CALL THE NEW YORK STATE DEPART-
MENT OF FINANCIAL SERVICES' TOLL-FREE HELPLINE AT 877-226-5697 OR VISIT
THE DEPARTMENT'S WEBSITE AT HTTP://WWW.DFS.NY.GOV.
IMPORTANT: YOU HAVE THE RIGHT TO REMAIN IN YOUR UNIT UNTIL YOU RECEIVE A
COURT ORDER TELLING YOU TO LEAVE THE PROPERTY. IF A FORECLOSURE ACTION
IS FILED AGAINST YOU IN COURT, YOU STILL HAVE THE RIGHT TO REMAIN IN THE
UNIT UNTIL A COURT ORDERS YOU TO LEAVE. YOU LEGALLY REMAIN THE OWNER OF
AND ARE RESPONSIBLE FOR THE UNIT UNTIL THE PROPERTY IS SOLD BY YOU OR BY
ORDER OF THE COURT AT THE CONCLUSION OF ANY FORECLOSURE PROCEEDINGS.
THIS NOTICE IS NOT AN EVICTION NOTICE, AND A FORECLOSURE ACTION HAS NOT
YET BEEN COMMENCED AGAINST YOU.
§ 3. The civil practice law and rules is amended by adding a new rule
3410 to read as follows:
RULE 3410. MANDATORY INTERVIEW FOR FORECLOSURE OF REVERSE COOPERATIVE
APARTMENT UNIT LOANS. (A) IN ANY FORECLOSURE ACTION INVOLVING A REVERSE
COOPERATIVE APARTMENT UNIT LOAN, IN WHICH THE DEFENDANT IS A RESIDENT OF
THE PROPERTY SUBJECT TO FORECLOSURE, THE LENDER SHALL HAVE A FACE-TO-
FACE INTERVIEW WITH THE BORROWER, OR MAKE A REASONABLE EFFORT TO ARRANGE
SUCH A MEETING, BEFORE THREE FULL MONTHLY INSTALLMENTS DUE ON THE LOAN
ARE UNPAID FOR THE PURPOSE OF HOLDING DISCUSSIONS PERTAINING TO THE
RELATIVE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER LOAN DOCUMENTS. IF
DEFAULT OCCURS IN A REPAYMENT PLAN ARRANGED OTHER THAN DURING A PERSONAL
INTERVIEW, THE LENDER MUST HAVE A FACE-TO-FACE MEETING WITH THE BORROW-
ER, OR MAKE A REASONABLE ATTEMPT TO ARRANGE SUCH A MEETING WITHIN THIRTY
DAYS AFTER SUCH DEFAULT AND AT LEAST THIRTY DAYS BEFORE FORECLOSURE IS
COMMENCED.
(B) A FACE-TO-FACE MEETING IS NOT REQUIRED IF:
(1) THE BORROWER DOES NOT RESIDE IN THE UNIT,
(2) THE BORROWER HAS CLEARLY INDICATED THAT HE OR SHE WILL NOT COOPER-
ATE IN THE INTERVIEW,
(3) A REPAYMENT PLAN CONSISTENT WITH THE BORROWER'S CIRCUMSTANCES IS
ENTERED INTO TO BRING THE BORROWER'S ACCOUNT CURRENT THUS MAKING A MEET-
ING UNNECESSARY, AND PAYMENTS THEREUNDER ARE CURRENT, OR
(4) A REASONABLE EFFORT TO ARRANGE A MEETING IS UNSUCCESSFUL.
(C) A REASONABLE EFFORT TO ARRANGE A FACE-TO-FACE MEETING WITH THE
BORROWER SHALL CONSIST AT A MINIMUM OF ONE LETTER SENT TO THE BORROWER
CERTIFIED BY THE POSTAL SERVICE AS HAVING BEEN DISPATCHED. SUCH A
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REASONABLE EFFORT TO ARRANGE A FACE-TO-FACE MEETING SHALL ALSO INCLUDE
AT LEAST ONE TRIP TO SEE THE BORROWER AT THE UNIT, UNLESS IT IS KNOWN
THAT THE MORTGAGOR IS NOT RESIDING IN THE MORTGAGED PROPERTY. IN ADDI-
TION, THE LENDER MUST DOCUMENT THAT IT HAS MADE AT LEAST ONE TELEPHONE
CALL TO THE BORROWER FOR THE PURPOSE OF TRYING TO ARRANGE A FACE-TO-FACE
INTERVIEW. THE LENDER MAY APPOINT AN AGENT TO PERFORM ITS RESPONSIBIL-
ITIES UNDER THIS RULE.
§ 4. This act shall take effect on the one hundred eightieth day after
it shall have become a law.