Bill Text: NY S04408 | 2019-2020 | General Assembly | Introduced
Bill Title: Requires an authorized lender which seeks to foreclose upon a reverse mortgage issued under the federal home equity conversion mortgage program to provide notice thereof to the department of financial services and to the mortgagor; directs such department to provide notice to the mortgagor of legal service organizations which may assist them with the default or foreclosure; prohibits authorized lenders from making advance payment of debts upon the mortgaged real property.
Spectrum: Partisan Bill (Democrat 5-0)
Status: (Passed) 2020-12-15 - APPROVAL MEMO.43 [S04408 Detail]
Download: New_York-2019-S04408-Introduced.html
STATE OF NEW YORK ________________________________________________________________________ 4408 2019-2020 Regular Sessions IN SENATE March 11, 2019 ___________ Introduced by Sen. GOUNARDES -- read twice and ordered printed, and when printed to be committed to the Committee on Aging AN ACT to amend the real property law, in relation to the regulation of default and foreclosure 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-d to read as follows: 3 § 280-d. Federal home equity conversion mortgage default and foreclo- 4 sure regulation. 1. For the purposes of this section, the following 5 terms shall 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) Department. The department of financial services established 15 pursuant to section one hundred two of the financial services law. 16 2. In the event of a default or foreclosure upon a reverse mortgage 17 loan, the authorized lender, upon the commencement of the foreclosure 18 proceeding, shall transmit to the department proof that the federal 19 Department of Housing and Urban Development has granted prior approval 20 to accelerate the loan, proof of the default notice to the mortgagor and 21 any such information relating to the loans and the mortgagor as the 22 department shall determine to be necessary. Upon receipt of such infor- 23 mation, the department shall provide notice of and information relating 24 to the foreclosure to the mortgagor. Such notice shall include a notice EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD00912-01-9S. 4408 2 1 of the mortgagor's rights in the foreclosure process and contact infor- 2 mation for legal service organizations which may be able to assist the 3 mortgagor with the mortgage default and/or foreclosure. 4 3. No reverse mortgage loan commitment shall be issued by an author- 5 ized lender unless such commitment provides in writing notice that the 6 department will be provided notice of any default or foreclosure upon 7 the loan so as to provide assistance to the mortgagor. 8 4. No authorized lender shall make an advance payment for any obli- 9 gation arising from mortgaged real property. Furthermore, in the event a 10 mortgagor defaults upon the payment of mortgage insurance premium, home- 11 owners insurance premium or real property tax related to the mortgaged 12 property, the authorized lender may only pay those premiums and/or taxes 13 which are in arrears. 14 5. The department shall issue regulations which shall require mortga- 15 gees to engage in mandatory loss mitigation procedures to be specified 16 by the department. These loss mitigation procedures shall comply with 17 any restrictions on loss mitigation issued by the federal Department of 18 Housing and Urban Development for reverse mortgages and shall be updated 19 when necessary to ensure compliance with federal rules. The mortgagee 20 shall provide information to the department about loans receiving such 21 loss mitigation assistance. This includes maintaining loan level, loss 22 mitigation data and providing the department with the following informa- 23 tion for loans associated with a repayment plan: 24 (a) monthly surplus income; 25 (b) term of repayment plan; 26 (c) amount of monthly repayment plan payment; 27 (d) due date of next monthly payment; 28 (e) when a mortgagor experiences a hardship; and 29 (f) reason for hardship. 30 6. Any person who has been injured by reason of any violation of this 31 section may bring an action in his or her own name to recover treble his 32 or her actual damages, plus the prevailing plaintiff's reasonable attor- 33 ney's fees. 34 7. The requirements of this section shall be conditions precedent to 35 commencing an action to foreclose upon a home equity conversion mortgage 36 which is subject to the provisions of this section, and failure to 37 comply therewith shall be a complete defense to a foreclosure action. 38 § 2. This act shall take effect on the one hundred twentieth day after 39 it shall have become a law; provided, however, that effective immediate- 40 ly, any actions necessary for the implementation of this act on its 41 effective date are authorized and directed to be completed on or before 42 such date.
