* § 6-o. Reverse cooperative apartment unit loans for persons
sixty-two 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 shares or membership in a cooperative apartment that is or intended
to be the primary residence of the borrower or borrowers the proceeds of
which are advanced to the borrower or borrowers during the term of the
loan in equal installments, or in advances through a line of credit or
otherwise, in a lump sum, or through a combination thereof. Interest and
fees will accrue during the life of the loan and will be added to the
principal balance of the loan, but will not become due and payable until
the borrower(s) dies, permanently vacates the apartment or defaults on
the terms of the loan, and will continue to accrue until the loan is
paid in full.

(b) Loan payout options:

(i) Term payment option. Under the term payment option, equal monthly
payments are made by the lender to the borrower for a fixed term of
months chosen by the borrower.

(ii) Tenure payment option. Under the tenure payment option, equal
monthly payments are made by the lender to the borrower, until the loan
is prepaid in full or becomes due and payable.

(iii) Line of credit payment option. Under the line of credit payment
option, payments are made by the lender to the borrower at times and in
amounts determined by the borrower as long as the amounts do not exceed
the maximum amount of loan proceeds.

(iv) Single lump sum payment option. Under the single lump sum payment
option, the borrower receives an amount from the lender that does not
exceed the maximum amount of loan proceeds. Set asides required for
disbursements such as loan closing costs or for monthly maintenance
fees, will be deducted from the amount of proceeds available to the
borrower.

(c) Authorized lender. Any bank, trust company, national banking
association, 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.

(d) Borrower. A tenant in severalty who is sixty-two 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 sixty-two years
age or older.

(e) Superintendent. The superintendent of financial services of this
state.

(f) Department. The department of financial services of this state.

(g) Third-party contact. The lender must ask the borrower if they want
to designate a third-party contact, such as a family member, trusted
friend, advisor or other party whom the borrower would like to be
contacted. It shall be the borrower's discretion to choose if the
third-party contact is to be contacted if (i) the borrower has not
returned the occupancy form, and/or (ii) the loan is in default for any
reason and the lender plans to proceed on collecting on the loan, i.e.,
initiating eviction or foreclosure and/or (iii) the borrower cannot be
reached.

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 for which the shares or
membership are the security for the reverse cooperative apartment unit
loan, as long as such apartment unit remains the borrowers' primary
residence and the borrower is not in default under the reverse
cooperative apartment unit loan. The borrower or borrowers must certify
annually on each anniversary of the loan, that they reside in the unit
and that it is their primary residence;

(b) annually the lender shall advise the borrower or borrowers of the
name and contact information, if any, on file for a third-party contact
designated pursuant to paragraph (g) of subdivision one of this section
and ask if the borrower or borrowers want to update or change the
information for the third-party contract;

(c) 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;

(d) subject to such rules or regulations as the superintendent may
adopt, the authorized lender may require a borrower to establish a set
aside account for the purposes of paying property taxes, maintenance or
cooperative fees, insurance premiums of the cooperative apartment unit,
or for the payment of any other fees and expenses;

(e) a lender who fails to make loan advances as required in the loan
documents, and fails to cure an actual default after notice as specified
in the loan documents, shall forfeit any right to collect interest or
service charges under the contract. The lender's right to recovery at
loan maturity shall be limited to the outstanding balance as of the date
of lender's default, minus all interest. However, a lender shall not be
required to make loan advances under a loan if the borrower is in
default under the loan;

(f) the outstanding balance may be prepaid in full by the borrower
without penalty at any time during the reverse cooperative apartment
unit loan term;

(g) an authorized lender is prohibited from using or attaching any
property or asset of the borrower or heirs of the borrower except the
shares or membership representing an ownership interest in the apartment
unit securing the reverse cooperative apartment unit loan in settlement
of a reverse loan obligation--the loan is a non-recourse loan;

(h) an authorized lender shall deliver to the applicant upon
application, a statement that complies with the requirements established
by the department providing the contact information for New York
approved, or U.S. Department of Housing and Urban Development approved,
reverse mortgage housing counselors with cooperative housing training
whom the cooperative apartment owner can call for independent counseling
and information services. Further, no reverse loan commitment shall be
issued by the authorized lender until the applicant presents, in
writing, a form that certifies the terms of the reverse cooperative
apartment unit loan have been explained to them by a New York or U.S.
Department of Housing and Urban Development approved reverse mortgage
housing counselor with cooperative housing training;

(i) an authorized lender shall deliver to an applicant such
disclosures as may be required by the superintendent which shall
describe the relevant portions of the reverse loan being offered, and
shall include but not be limited to the following items:

(i) a schedule of payments to and from the borrower and the total
payments in dollars over the life expectancy of the youngest borrower of
the reverse cooperative apartment unit loan for the borrower;

(ii) a statement prominently displayed advising applicants to consult
with appropriate authorities regarding tax and estate planning
consequences 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, an
estimate of 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 cause the loan
to become due and payable (or cause the borrower to default) 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;

(j) an authorized lender shall deliver to each borrower at the time of
closing of a reverse cooperative unit loan two copies of the borrower's
right to cancel and instructions for how to cancel the loan that
complies with the requirements to be prescribed by the superintendent;

(k) a reverse cooperative apartment unit loan pursuant to this section
shall expressly and conspicuously bear a legend identifying it as such
in at least fourteen-point font;

(l) a reverse cooperative apartment unit loan shall clearly set forth
the terms for when the loan becomes due and payable, including:

(i) regardless of loan payout option chosen by the borrower, the loan
note shall state that the outstanding loan balance will not be due and
payable in full until the last borrower dies, or if a borrower conveys
all of his or her title in the property and no other borrower retains
title to the property; and

(ii) the loan note shall state that the outstanding loan balance shall
be due and payable in full if any of the following occur:

(1) the cooperative apartment unit ceases to be the primary residence
of a borrower for reasons other than death and the cooperative apartment
unit is not the primary residence of at least one other borrower;

(2) for a period of longer than twelve consecutive months, a borrower
fails to occupy the cooperative apartment unit because of physical or
mental illness and the cooperative apartment unit is not the primary
residence of at least one other borrower; or

(3) an obligation of the borrower under the loan note is not met;

(m) within thirty business days of learning of the occurrence of any
event listed in paragraph (l) of this subdivision, the mortgagee shall
notify the mortgagor and their authorized designee, in writing, of such
occurrence, along with information on the right to cure. The mortgagee
shall then allow the mortgagor forty-five calendar days to cure. A
mortgagee may only terminate a reverse mortgage loan if the mortgagor
fails to cure any termination event within such forty-five calendar day
period. In the event that the borrower has not designated a third-party
contact to receive such notice of foreclosure, then the authorized
lender or the holder of said reverse cooperative apartment 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;

(n) a reverse cooperative apartment unit loan secured by shares or a
membership representing an ownership interest in a unit in a cooperative
housing corporation shall also be subject to the prior approval by the
cooperative's board of directors; and

(o) no reverse cooperative apartment unit loan shall be subject to
mandatory binding arbitration.

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
cooperative 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 third party counseling, the costs of paying off
any 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 such rules or regulations as he or
she considers appropriate to govern a 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.

5. No authorized lender or any other party or entity shall in any
manner, in the marketing or offering of reverse cooperative apartment
unit loans, engage in any unfair or deceptive practices in connection
with the marketing or offering of reverse cooperative apartment unit
loans, and, additionally, shall not:

(a) use the words "public service announcement" in any commercial,
mailing, advertisement or writing relating thereto;

(b) use the words "government insured" or other similar language
representing that reverse cooperative apartment unit loans are insured,
supported and sponsored by any governmental entity in any commercial,
mailing, advertisement or writing relating thereto; or

(c) represent that any such loan is other than a commercial product.

6. (a) Every authorized lender and assignee must obtain a surety bond
in the amount of one hundred thousand dollars for the benefit of claims
against the lender/assignee for failure to perform their obligations to
the borrower. The superintendent will hold the surety bond. In addition,
a lender or assignee shall maintain an irrevocable standby letter of
credit from a financial institution approved by the superintendent in
favor of the lender or assignee in an amount necessary to fund all
reverse mortgage loan requirements anticipated over the next twelve
months for loans then on the lender's books and those expected to be
made over the next twelve months or three million dollars, whichever is
greater. The initial term of the letter of credit shall be at least two
years. A lender or assignee also shall maintain a minimum capital of ten
million dollars. A lender may rely upon its parent company to meet the
minimum capital requirements.

(b) Every authorized lender or its agent shall provide, with any
solicitation for reverse cooperative apartment unit loan 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.

(c) Every authorized lender shall provide each applicant or potential
applicant for a reverse cooperative apartment unit loan with the
telephone number and internet website address provided by the department
for the purposes of acquiring reverse cooperative apartment unit loan
counseling.

(d) The superintendent is authorized to promulgate such rules and
regulations as he or she shall deem necessary to implement the
provisions of this subdivision.

7. For reverse cooperative apartment unit loans, authorized lender and
their agents shall:

(a) provide a monthly account statement, and for all borrowers whose
maintenance fees, special assessments mortgage insurance payments,
homeowners insurance payments, or payments stemming from any other
property obligation or obligations are administered by the authorized
lender, and where these payments are derived from the proceeds of the
loan, the authorized lender shall provide on the borrower's account
statement the current balance remaining in the borrower's line of credit
or lifetime expectancy set aside, the projected annual property charges
for that year, and a notice which reads in at least fourteen point type:

"YOUR MAINTENANCE FEES AND SPECIAL ASSESSMENTS ARE CURRENTLY BEING
PAID BY THE PROCEEDS OF THIS LOAN. THE FUNDS THAT HAVE BEEN SET ASIDE
ARE EXPECTED TO BE EXHAUSTED AFTER THE MAINTENANCE FEES AND SPECIAL
ASSESSMENT PAYMENTS OF (SPECIFY EXPECTED MONTH AND YEAR). IF THE
PROCEEDS OF THIS LOAN CANNOT PAY THE MAINTENANCE FEES AND SPECIAL
ASSESSMENTS, YOU MUST PAY THESE OBLIGATIONS OR YOUR COOP SHARES MAY BE
LOST TO FORECLOSURE. PLEASE NOTE THAT MAINTENANCE FEES AND SPECIAL
ASSESSMENTS CAN VARY SO YOU SHOULD CONTINUE TO REVIEW THIS NOTICE FOR
CHANGES."

(b) by telephone and first class mail, inform and provide notice to a
borrower when his or her home equity line of credit or life expectancy
set aside is depleted to twenty percent. Such notice shall inform the
borrower of his or her obligations relating to the cooperative apartment
unit including, but not limited 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. If the
lender or its agent is unable to contact the borrower by telephone,
notice must be sent to the third-party contact if authorized by the
borrower.

(c) Each authorized lender shall, by telephone and first class mail,
inform and provide notice to a borrower when his or her home equity line
of credit or life expectancy set aside is depleted. Such notice shall
inform the borrower of his or her obligations relating to the
cooperative apartment unit including, but not limited to, mortgage
insurance, 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
meanings, appropriately divided and captioned by its various sections.

8. In the event that an authorized lender determines a reverse
cooperative apartment unit loan to be in default on the basis that the
cooperative apartment is no longer the primary residence of or occupied
by the borrower, if during the verification of the borrower'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 borrower, or if the borrower is unreachable by telephone,
to the third-party contact if designated, and an in person visit to be
made to the borrower at the cooperative apartment to be made prior to
the commencement of any proceeding to enforce the lender's rights under
the note. 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 cooperative apartment unit loan, the reason for the home
visit, and the telephone number to call for further information. 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 cooperative apartment is no longer the primary
residence of the borrower. If the borrower contacts the authorized
lender and provides proof of residence or occupancy after such visit but
before the commencement of a proceeding to enforce the lender's rights
under the note, the authorized lender shall be barred from initiating
such action. Furthermore, no authorized lender shall charge a borrower
any fee for any such visit and inspection. This prohibition on the
imposition of fees shall include any and all inspections conducted by
the authorized lender to verify the status of the reverse cooperative
apartment unit loan, or any suspected or actual default condition.

9. 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, and other charges
assessed in connection with the reverse loan, shall date from the filing
of a UCC-1 notice for the loan irrespective of the date of any advance
of reverse loan proceeds or the date by which an authorized lender shall
be entitled to accrued but unpaid interest, fees, costs or other
charges.

10. Nothing in this section shall be construed to limit, impair or
otherwise affect the priority, under applicable law, of any other
mortgage, deed of trust, encumbrance or lien which was filed prior to
the effective date of this section.

11. The sale or transfer of the interest in the cooperative apartment
unit to a person other than an original borrower or borrowers shall
result in the termination of the reverse loan.

12. Any person who has been injured by reason of any violation of this
section or any violation of the rules and regulations of the department
relating to the reverse cooperative apartment unit loan 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 attorneys'
fees.

13. Compliance with the provisions of this section shall be conditions
precedent to commencing an action to foreclose upon a reverse
cooperative apartment unit loan which is subject to the provisions of
this section, and the failure to comply therewith shall be a complete
defense to such action.

* NB There are 2 § 6-o's