S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   5626
 
                        2019-2020 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             February 14, 2019
                                ___________
 
 Introduced  by  M.  of A. WEINSTEIN, MOSLEY, ABBATE, COLTON, CYMBROWITZ,
   GALEF, ZEBROWSKI, JOYNER, ORTIZ,  GLICK,  DINOWITZ,  CARROLL,  D'URSO,
   STECK,  HYNDMAN,  RICHARDSON,  AUBRY,  SEAWRIGHT,  ABINANTI,  WALLACE,
   CAHILL, LUPARDO, BURKE, TAYLOR -- Multi-Sponsored by -- M. of A. COOK,
   ENGLEBRIGHT, NOLAN, SIMON, THIELE -- read once  and  referred  to  the
   Committee on Judiciary
 
 AN  ACT  to  amend  the  real property law, in relation to regulation of
   reverse mortgages issued under  the  federal  home  equity  conversion
   mortgage for seniors program
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. The real property law is amended by adding  a  new  section
 280-b to read as follows:
   §  280-B.  FEDERAL HOME EQUITY CONVERSION MORTGAGE REGULATION. 1.  FOR
 THE PURPOSES OF THIS SECTION, THE FOLLOWING TERMS SHALL HAVE THE FOLLOW-
 ING MEANINGS:
   (A) REVERSE MORTGAGE LOAN. A  REVERSE  MORTGAGE  LOAN  AS  DEFINED  IN
 SECTION  TWO  HUNDRED  EIGHTY  OF  THIS ARTICLE, WHICH IS ISSUED IN THIS
 STATE PURSUANT TO  THE  HOME  EQUITY  CONVERSION  MORTGAGE  FOR  SENIORS
 PROGRAM OPERATED BY THE FEDERAL DEPARTMENT OF HOUSING AND URBAN DEVELOP-
 MENT.
   (B)  AUTHORIZED LENDER. AN AUTHORIZED LENDER AS DEFINED IN SECTION TWO
 HUNDRED EIGHTY OF THIS  ARTICLE  AUTHORIZED  TO  MAKE  REVERSE  MORTGAGE
 LOANS, AS DEFINED IN THIS SECTION.
   (C)  SUPERINTENDENT.  THE  SUPERINTENDENT OF FINANCIAL SERVICES ESTAB-
 LISHED PURSUANT TO SECTION TWO HUNDRED TWO  OF  THE  FINANCIAL  SERVICES
 LAW.
   2.  NO  AUTHORIZED  LENDER  OR  ANY OTHER PARTY OR ENTITY SHALL IN ANY
 MANNER, IN THE MARKETING OR OFFERING OF REVERSE MORTGAGE  LOANS,  ENGAGE
 IN ANY UNFAIR OR DECEPTIVE PRACTICES IN CONNECTION WITH THE MARKETING OR
 OFFERING OF REVERSE MORTGAGE LOANS, AND, ADDITIONALLY, SHALL NOT:
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD00905-01-9

 A. 5626                             2
 
   (A)  USE  THE  WORDS  "PUBLIC SERVICE ANNOUNCEMENT" IN ANY COMMERCIAL,
 MAILING, ADVERTISEMENT OR WRITING RELATING THERETO; OR
   (B)  USE  THE  WORDS  "GOVERNMENT  INSURED"  OR OTHER SIMILAR LANGUAGE
 REPRESENTING THAT REVERSE MORTGAGE  LOANS  ARE  INSURED,  SUPPORTED  AND
 SPONSORED  BY ANY GOVERNMENTAL ENTITY IN ANY COMMERCIAL, MAILING, ADVER-
 TISEMENT OR WRITING RELATING THERETO; OR
   (C) REPRESENT THAT ANY SUCH LOAN IS OTHER THAN A COMMERCIAL PRODUCT.
   3. (A) EVERY AUTHORIZED LENDER OR ITS AGENT SHALL  PROVIDE,  WITH  ANY
 SOLICITATION  FOR REVERSE MORTGAGE PRODUCTS MAILED TO A PHYSICAL ADDRESS
 WITHIN THE STATE, SUPPLEMENTAL CONSUMER PROTECTION MATERIALS THE CONTENT
 AND FORM OF WHICH SHALL BE SPECIFIED BY THE SUPERINTENDENT OR HIS OR HER
 DESIGNEE.
   (B) EVERY AUTHORIZED LENDER SHALL PROVIDE EACH APPLICANT OR  POTENTIAL
 APPLICANT  FOR  A  REVERSE  MORTGAGE  LOAN WITH THE TELEPHONE NUMBER AND
 INTERNET WEBSITE ADDRESS PROVIDED BY THE FEDERAL DEPARTMENT  OF  HOUSING
 AND  URBAN DEVELOPMENT FOR THE PURPOSES OF ACQUIRING HOME EQUITY CONVER-
 SION MORTGAGE COUNSELING.
   (C) THE SUPERINTENDENT IS AUTHORIZED  TO  PROMULGATE  SUCH  RULES  AND
 REGULATIONS  AS  HE  OR  SHE  SHALL  DEEM  NECESSARY  TO  IMPLEMENT  THE
 PROVISIONS OF THIS SUBDIVISION.
   4. (A) REVERSE MORTGAGES SECURED BY RESIDENTIAL REAL  PROPERTY  WITHIN
 THE  STATE  SHALL BE SUBJECT TO THE RULES AND REGULATIONS OF THE FEDERAL
 DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT RELATING TO THE HOME  EQUITY
 CONVERSION MORTGAGE PROGRAM.
   (B) FOR ALL BORROWERS WHOSE TAX PAYMENTS, MORTGAGE INSURANCE PAYMENTS,
 HOMEOWNERS INSURANCE PAYMENTS, OR PAYMENTS STEMMING FROM ANY OTHER PROP-
 ERTY  OBLIGATION OR OBLIGATIONS ARE ADMINISTERED BY THE AUTHORIZED LEND-
 ER, AND WHERE THESE PAYMENTS ARE DERIVED FROM THE PROCEEDS OF THE  MORT-
 GAGE,  THE  AUTHORIZED  LENDER  SHALL PROVIDE ON THE BORROWER'S PERIODIC
 ACCOUNT STATEMENT THE CURRENT BALANCE REMAINING IN THE  BORROWER'S  LINE
 OF CREDIT OR LIFETIME EXPECTANCY SET ASIDE, THE PROJECTED ANNUAL PROPER-
 TY  CHARGES  FOR  THAT YEAR, AND A NOTICE WHICH READS IN AT LEAST TWELVE
 POINT TYPE: "YOUR TAXES AND INSURANCE ARE CURRENTLY BEING  PAID  BY  THE
 PROCEEDS  OF  THIS  MORTGAGE.  THE  FUNDS  THAT  HAVE BEEN SET ASIDE ARE
 EXPECTED TO BE EXHAUSTED AFTER THE TAX AND INSURANCE PAYMENTS OF (SPECI-
 FY EXPECTED MONTH AND YEAR). IF THE PROCEEDS OF THIS MORTGAGE CANNOT PAY
 THE TAXES AND INSURANCE, YOU MUST PAY THESE OBLIGATIONS OR YOUR HOME MAY
 BE LOST TO FORECLOSURE. PLEASE NOTE THAT AS TAX  AND  INSURANCE  AMOUNTS
 CAN VARY YOU SHOULD CONTINUE TO REVIEW THIS NOTICE FOR CHANGES."
   (C)  AN  AUTHORIZED  LENDER  SHALL, BY TELEPHONE AND FIRST CLASS MAIL,
 INFORM AND PROVIDE NOTICE TO A MORTGAGOR WHEN HIS  OR  HER  HOME  EQUITY
 LINE  OF  CREDIT OR LIFE EXPECTANCY SET ASIDE IS DEPLETED TO TEN PERCENT
 OR LESS OF ITS VALUE. SUCH NOTICE SHALL INFORM THE MORTGAGOR OF  HIS  OR
 HER OBLIGATIONS RELATING TO SUCH REAL PROPERTY INCLUDING, BUT NOT LIMIT-
 ED  TO, MORTGAGE INSURANCE, HOMEOWNERS INSURANCE AND REAL PROPERTY TAXES
 PREVIOUSLY PAID BY SUCH LINE OF CREDIT OR LIFE EXPECTANCY SET ASIDE, AND
 THAT SUCH OBLIGATIONS MUST CONTINUE TO BE PAID WHEN THE HOME EQUITY LINE
 OF CREDIT OR LIFE EXPECTANCY SET ASIDE IS DEPLETED.   SUCH NOTICE  SHALL
 USE  PLAIN  LANGUAGE, WRITTEN IN A CLEAR AND COHERENT MANNER USING WORDS
 WITH COMMON AND EVERY DAY MEANINGS, APPROPRIATELY DIVIDED AND  CAPTIONED
 BY ITS VARIOUS SECTIONS.
   (D)  EACH  AUTHORIZED LENDER SHALL, BY TELEPHONE AND FIRST CLASS MAIL,
 INFORM AND PROVIDE NOTICE TO A MORTGAGOR WHEN HIS  OR  HER  HOME  EQUITY
 LINE  OF  CREDIT  OR  LIFE EXPECTANCY SET ASIDE IS DEPLETED. SUCH NOTICE
 SHALL INFORM THE MORTGAGOR OF HIS OR HER  OBLIGATIONS  RELATING  TO  THE
 MORTGAGED  REAL  PROPERTY INCLUDING, BUT NOT LIMITED TO, MORTGAGE INSUR-

 A. 5626                             3
 
 ANCE, HOMEOWNERS INSURANCE AND REAL PROPERTY TAXES, AND  THAT  THE  HOME
 EQUITY  LINE  OF  CREDIT OR LIFE EXPECTANCY SET ASIDE WILL NO LONGER PAY
 THESE OBLIGATIONS.  SUCH NOTICE SHALL USE PLAIN LANGUAGE, WRITTEN  IN  A
 CLEAR  AND  COHERENT  MANNER USING WORDS WITH COMMON AND EVERY DAY MEAN-
 INGS, APPROPRIATELY DIVIDED AND CAPTIONED BY ITS VARIOUS SECTIONS.
   5. NO AUTHORIZED LENDER SHALL MAKE AN ADVANCE PAYMENT  FOR  ANY  OBLI-
 GATION ARISING FROM MORTGAGED REAL PROPERTY. FURTHERMORE, IN THE EVENT A
 MORTGAGOR DEFAULTS UPON THE PAYMENT OF MORTGAGE INSURANCE PREMIUM, HOME-
 OWNERS'  INSURANCE PREMIUM OR REAL PROPERTY TAX RELATED TO THE MORTGAGED
 PROPERTY, THE AUTHORIZED LENDER MAY ONLY PAY THOSE PREMIUMS AND/OR TAXES
 WHICH ARE IN ARREARS.
   6. IN THE EVENT THAT AN AUTHORIZED LENDER  SEEKS  TO  FORECLOSE  ON  A
 REVERSE  MORTGAGE  LOAN ON THE BASIS THAT THE MORTGAGED REAL PROPERTY IS
 NO LONGER THE PRIMARY RESIDENCE OF OR  OCCUPIED  BY  THE  MORTGAGOR,  IF
 DURING  THE  VERIFICATION  OF  THE  MORTGAGOR'S PRIMARY RESIDENCE AND/OR
 OCCUPANCY NO RESPONSES ARE RECEIVED IN  RESPONSE  TO  MAILINGS  RELATING
 THERETO,  SUCH  LENDER  SHALL  CAUSE  A TELEPHONE CALL TO BE MADE TO THE
 MORTGAGOR, OR IF THE MORTGAGOR IS UNREACHABLE BY TELEPHONE, A DESIGNATED
 THIRD-PARTY SPECIFIED BY THE MORTGAGOR, AND AN IN  PERSON  VISIT  TO  BE
 MADE TO THE MORTGAGOR AT THE MORTGAGED REAL PROPERTY TO BE MADE PRIOR TO
 THE  COMMENCEMENT OF ANY FORECLOSURE PROCEEDING.  DURING SUCH VISIT, THE
 AUTHORIZED LENDER OR ITS AGENT SHALL PROVIDE CLEAR INFORMATION AS TO WHO
 THEY ARE, THAT THE VISIT PERTAINS TO THE REVERSE  MORTGAGE,  THE  REASON
 FOR  THE HOME VISIT, AND THE TELEPHONE NUMBER TO CALL FOR FURTHER INFOR-
 MATION.  THE AUTHORIZED LENDER MUST WAIT AT LEAST THIRTY DAYS  FOLLOWING
 SUCH  VISIT,  IN  ADDITION TO ANY ADDITIONAL TIME OR NOTICE REQUIREMENTS
 SPECIFIED BY ANY OTHER PROVISION OF LAW, BEFORE INITIATING A FORECLOSURE
 ACTION ON THE BASIS THAT THE MORTGAGED REAL PROPERTY IS  NO  LONGER  THE
 PRIMARY  RESIDENCE  OF  THE  MORTGAGOR.  IF  THE  MORTGAGOR CONTACTS THE
 AUTHORIZED LENDER AND PROVIDES PROOF OF  RESIDENCE  OR  OCCUPANCY  AFTER
 SUCH  VISIT  BUT  BEFORE  THE  COMMENCEMENT OF A FORECLOSURE ACTION, THE
 AUTHORIZED LENDER SHALL  BE  BARRED  FROM  INITIATING  SUCH  FORECLOSURE
 ACTION.   FURTHERMORE, NO AUTHORIZED LENDER SHALL CHARGE A MORTGAGOR ANY
 FEE FOR ANY SUCH VISIT AND INSPECTION. THIS PROHIBITION ON  THE  IMPOSI-
 TION  OF  FEES  SHALL  INCLUDE  ANY AND ALL INSPECTIONS CONDUCTED BY THE
 AUTHORIZED LENDER TO VERIFY THE STATUS OF THE REVERSE MORTGAGE,  OR  ANY
 SUSPECTED OR ACTUAL DEFAULT CONDITION.
   7.  BOTH  THE AUTHORIZED LENDER AND THE MORTGAGOR SHALL BE REPRESENTED
 BY AN ATTORNEY OR ATTORNEYS AT THE TIME OF THE CLOSING  ON  THE  REVERSE
 MORTGAGE,  AND  EACH SUCH PARTY SHALL HAVE AT LEAST ONE ATTORNEY PRESENT
 TO CONDUCT THE CLOSING.
   8. ANY PERSON WHO HAS BEEN INJURED BY REASON OF ANY VIOLATION OF  THIS
 SECTION  OR  ANY  VIOLATION  OF THE RULES AND REGULATIONS OF THE FEDERAL
 DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT RELATING TO THE HOME  EQUITY
 CONVERSION  MORTGAGE  PROGRAM MAY BRING AN ACTION IN HIS OR HER OWN NAME
 TO RECOVER TREBLE  HIS  OR  HER  ACTUAL  DAMAGES,  PLUS  THE  PREVAILING
 PLAINTIFF'S REASONABLE ATTORNEY'S FEES.
   9.  COMPLIANCE WITH THE PROVISIONS OF THIS SECTION SHALL BE CONDITIONS
 PRECEDENT TO COMMENCING AN  ACTION  TO  FORECLOSE  UPON  A  HOME  EQUITY
 CONVERSION  MORTGAGE WHICH IS SUBJECT TO THE PROVISIONS OF THIS SECTION,
 AND THE FAILURE TO COMPLY THEREWITH SHALL BE A  COMPLETE  DEFENSE  TO  A
 FORECLOSURE ACTION.
   §  2.  This  act shall take effect on the ninetieth day after it shall
 have become a law; provided, that, effective immediately the superinten-
 dent of financial services is authorized  and  directed  to  amend,  add
 and/or  repeal  any  rules  and  regulations  necessary to implement the

 A. 5626                             4
 
 provision of this act within 180 days after this act shall have become a
 law.