S02373 Summary:

Add 280-b, RP L
Provides for the establishment of the New York state home equity conversion information summary to provide notice of mortgagor's right and responsibilities under reverse mortgage loans issued under the home equity conversion mortgage program of the federal Department of Housing and Urban Development; provides that every authorized lender must provide copies of such summary not less than 5 days prior to closing on a reverse mortgage loan; establishes a private right of action for violations of such provisions.
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S02373 Actions:

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S02373 Committee Votes:

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S02373 Floor Votes:

There are no votes for this bill in this legislative session.
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S02373 Memo:

Memo not available
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S02373 Text:

                STATE OF NEW YORK
                               2019-2020 Regular Sessions
                    IN SENATE
                                    January 24, 2019
        Introduced by Sens. CARLUCCI, SEPULVEDA -- read twice and ordered print-
          ed, and when printed to be committed to the Committee on Aging
        AN  ACT  to amend the real property law, in relation to the provision of
          certain information to mortgagors 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:
     1    Section 1. The real property law is amended by adding  a  new  section
     2  280-b to read as follows:
     3    §  280-b.  Federal home equity conversion mortgage information summary
     4  sheet. 1. For the purposes of this section  the  following  terms  shall
     5  have the following meanings:
     6    (a)  Reverse  mortgage  loan.  A  reverse  mortgage loan as defined in
     7  section two hundred eighty of this article,  which  is  issued  in  this
     8  state  pursuant  to  the  home  equity  conversion  mortgage for seniors
     9  program operated by the federal Department of Housing and Urban Develop-
    10  ment.
    11    (b) Authorized lender. An authorized lender as defined in section  two
    12  hundred  eighty  of  this  article  authorized  to make reverse mortgage
    13  loans, as defined in this section.
    14    (c) Mortgagor. A mortgagor as defined in section two hundred eighty of
    15  this article.
    16    (d) Department.  The  department  of  financial  services  established
    17  pursuant to section one hundred two of the financial services law.
    18    2.  The  department shall establish and distribute to authorized lend-
    19  ers, and periodically update, a New York state  home  equity  conversion
    20  information summary. Such summary shall include, but not be limited to:
    21    (a)  notice that reverse mortgage loans are not free or cost free, and
    22  such loans have associated costs that  are  included  in  the  financing
    23  thereof;
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.

        S. 2373                             2
     1    (b)  a  schedule of payments to be made to and from the mortgagor, and
     2  the total payment for both the mortgagee and the authorized lender  over
     3  the  term  of the reverse mortgage loan contingent upon the type of such
     4  loan being offered;
     5    (c)  a  statement advising mortgagors to consult with licensed profes-
     6  sionals regarding the tax and estate planning  consequences  of  reverse
     7  mortgage loans;
     8    (d)  where applicable, a description of the prepayment and refinancing
     9  provisions of the reverse mortgage loan;
    10    (e) an explanation and itemization of the potential costs  of  reverse
    11  mortgage  loans, including the rate of interest and total interest paya-
    12  ble on such loan;
    13    (f) a summary of actions or conditions that will constitute a  default
    14  of the reverse mortgage loan;
    15    (g)  a  summary  and  explanation  of  alternatives to entering into a
    16  reverse mortgage loan on the basis of economic hardship  including,  but
    17  not  limited  to,  direct  sale  of  the  residence,  social  safety net
    18  programs, debt consolidation or economic counseling;
    19    (h) information on a mortgagor's basic rights in the foreclosure proc-
    20  ess;
    21    (i) a summary of the real property tax exemptions which are  available
    22  to the mortgagor in order to reduce his or her cost of living;
    23    (j)  information about New York state-based organizations that provide
    24  federal Department of Housing and Urban  Development  certified  reverse
    25  mortgage counseling;
    26    (k)  information  on  legal  assistance and advocacy organizations and
    27  services which provide  assistance  to  mortgagors  in  the  event  that
    28  complications or issues arise relating to the reverse mortgage loan; and
    29    (l)  such  other information as the department shall deem necessary to
    30  fully inform mortgagors of their rights  and  responsibilities  under  a
    31  reverse mortgage loan.
    32    3.  Not  less than five days prior to the closing upon a reverse mort-
    33  gage loan, the authorized lender shall  provide  the  mortgagor  with  a
    34  completed  New  York state home equity conversion information summary in
    35  duplicate.   Each mortgagor shall sign  both  copies  of  such  summary,
    36  attesting that he or she has read and fully understands the summary. One
    37  copy  thereof  shall  be retained by the authorized lender and the other
    38  shall be retained by the mortgagor's attorney.
    39    4. The provision  of  the  information  summary  established  by  this
    40  section is integral to the execution of a reverse mortgage loan, thus in
    41  the absence of such a summary the related reverse mortgage loan shall be
    42  null and void.
    43    5.  Any person who has been injured by reason of any violation of this
    44  section or the rules and regulations related thereto may bring an action
    45  in his or her own name to recover treble his or her actual damages, plus
    46  the prevailing plaintiff's reasonable attorneys fee.
    47    6. The superintendent of financial services is authorized  to  promul-
    48  gate any rules or regulations he or she deems necessary to implement the
    49  provisions of this section.
    50    § 2. This act shall take effect on the one hundred twentieth day after
    51  it  shall have become a law. Effective immediately, the addition, amend-
    52  ment and/or repeal of any rule or regulation necessary for the implemen-
    53  tation of this act on its effective date are authorized to be  made  and
    54  completed on or before such effective date.
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