NY A01508

Authorizes reverse cooperative apartment unit loans secured by shares in cooperative housing for borrowers age 62 and older, with interest and fees accruing but not due until borrower dies, permanently vacates, or defaults on the loan.

Requires lenders to obtain $100,000 surety bonds and maintain $10 million minimum capital or irrevocable standby letters of credit; prohibits mandatory binding arbitration and establishes non-recourse loan structure limiting recovery to the cooperative apartment unit only.

Mandates lender compliance with mandatory counseling requirements, monthly account statements, notifications when funds are depleted to 20% or less of value, and 45-day notice before foreclosure proceedings with specific disclosures about loan terms and borrower rights.

Establishes court-supervised mandatory settlement conference process within 60 days of default notice, requiring good faith negotiation between lender and borrower to explore resolution options; permits courts to impose penalties up to $25,000 and award damages for lender non-compliance.

Requires lenders to conduct in-person visits and telephone calls before initiating foreclosure for non-occupancy; prohibits inspection fees and deceptive marketing practices including false claims about government insurance or endorsement.