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NY A05626
Bill
Status
12/6/2019
Primary Sponsor
Helene Weinstein
Click for details
AI Summary
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Prohibits authorized lenders from using deceptive marketing practices including the terms "public service announcement," "government insured," or misrepresenting reverse mortgage loans as anything other than commercial products.
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Requires lenders to provide supplemental consumer protection materials with solicitations, furnish borrowers with federal HUD counseling contact information, and supply periodic account statements showing remaining line of credit balance and projected property charges.
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Mandates lenders notify borrowers by phone and mail when equity line of credit or life expectancy set-aside reaches 10 percent or less, and again when fully depleted, using plain language explaining ongoing obligations for taxes, insurance, and mortgage insurance.
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Prohibits lenders from making advance payments on property obligations and restricts foreclosure based on non-occupancy until lenders attempt telephone contact, conduct an in-person visit, wait 30 days, and provide the borrower opportunity to prove residency.
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Requires both lender and borrower to be represented by attorneys at reverse mortgage closing and establishes a private right of action for violations allowing recovery of treble damages plus attorney's fees; non-compliance is a complete defense to foreclosure.
Legislative Description
Provides for the regulation of reverse mortgages that are issued under the federal home equity conversion mortgage program; prohibits the deceptive advertising and issuance of such mortgages; requires that independent counseling be provided to applicants for such mortgages; requires lenders to provide notice of duty of mortgagor to pay certain property related expenses when equity in the real property is low or depleted; prohibits foreclosure on mortgaged property based on the failure of the mortgagor to live on the property, until an inspection has been made at the property; establishes a proved right of action with treble damages for violations of such provisions.
Last Action
approval memo.27
12/6/2019