NY Real Prop L § 280-B (2021)
2021 New York Laws RPP - Real Property Article 8 - Conveyances and Mortgages 280-B - Federal Home Equity Conversion Mortgage Regulation.

§  280-b.  Federal  home equity conversion mortgage regulation. 1. For the purposes of  this  section,  the  following  terms  shall  have  the following meanings:  (a)  Reverse  mortgage  loan.  A  reverse  mortgage loan as defined in section two hundred eighty of this article,  which  is  issued  in  this state  pursuant  to  the  home  equity  conversion  mortgage for seniors program  operated  by  the  federal  Department  of  Housing  and  Urban Development.  (b)  Authorized lender. An authorized lender as defined in section two hundred eighty of this  article  authorized  to  make  reverse  mortgage loans, as defined in this section.  (c)   Superintendent.   The   superintendent   of  financial  services established pursuant  to  section  two  hundred  two  of  the  financial services law.   2.  No  authorized  lender  or  any other party or entity shall in any manner, in the marketing or offering of reverse mortgage  loans,  engage in any unfair or deceptive practices in connection with the marketing or offering of reverse mortgage loans, and, additionally, shall not:  (a)  use  the  words  "public service announcement" in any commercial, mailing, advertisement or writing relating thereto; or  (b) use the words "government insured" or other similar language in  a manner  that falsely represents that reverse mortgage 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.   3.  (a)  Every  authorized lender or its agent shall provide, with any solicitation for reverse mortgage 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.  (b)  Every authorized lender shall provide each applicant or potential applicant for a reverse mortgage loan  with  the  telephone  number  and internet  website  address provided by the federal Department of Housing and  Urban  Development  for  the  purposes  of  acquiring  home  equity conversion mortgage counseling.  (c)  The  superintendent  is  authorized  to promulgate such rules and regulations  as  he  or  she  shall  deem  necessary  to  implement  the provisions of this subdivision.   4.  (a)  Reverse mortgages secured by residential real property within the state shall be subject to the rules and regulations of  the  federal Department  of Housing and Urban Development relating to the home equity conversion mortgage program.  (b) For all borrowers whose tax payments, 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 mortgage, the authorized lender shall provide on the borrower's periodic 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 twelve point type: "YOUR TAXES AND INSURANCE ARE CURRENTLY BEING PAID BY THE PROCEEDS OF THIS MORTGAGE. THE FUNDS THAT HAVE BEEN  SET  ASIDE  ARE EXPECTED  TO  BE  EXHAUSTED  AFTER  THE  TAX  AND  INSURANCE PAYMENTS OF (SPECIFY EXPECTED MONTH AND YEAR). IF  THE  PROCEEDS  OF  THIS  MORTGAGE CANNOT  PAY  THE  TAXES AND INSURANCE, YOU MUST PAY THESE OBLIGATIONS OR YOUR HOME MAY BE LOST TO  FORECLOSURE.  PLEASE  NOTE  THAT  AS  TAX  AND INSURANCE AMOUNTS CAN VARY YOU SHOULD CONTINUE TO REVIEW THIS NOTICE FOR CHANGES."  (c)  An  authorized  lender  shall, by telephone and first class mail, inform and provide notice to a mortgagor when his  or  her  home  equity line  of  credit or life expectancy set aside is depleted to ten percent or less of its value. Such notice shall inform the mortgagor of  his  or her  obligations  relating  to  such  real  property  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.  (d) Each authorized lender shall, by telephone and first  class  mail, inform  and  provide  notice  to a mortgagor when his or her home equity line of credit or life expectancy set aside  is  depleted.  Such  notice shall  inform  the  mortgagor  of his or her obligations relating to the mortgaged  real  property  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.   5.  No  authorized  lender  shall  make  an  advance  payment  for any obligation arising from mortgaged real  property.  Furthermore,  in  the event  a  mortgagor  defaults  upon  the  payment  of mortgage insurance premium, homeowners' insurance premium or real property tax  related  to the  mortgaged  property,  the  authorized  lender  may  only  pay those premiums and/or taxes which are in arrears.   6. In the event that an authorized lender  seeks  to  foreclose  on  a reverse  mortgage  loan on the basis that the mortgaged real property is no longer the primary residence of or  occupied  by  the  mortgagor,  if during  the  verification  of  the  mortgagor'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 mortgagor, or if the mortgagor is unreachable by telephone, a designated third-party specified by the mortgagor, and an in  person  visit  to  be made to the mortgagor at the mortgaged real property to be made prior to the  commencement  of any foreclosure proceeding. 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  mortgage,  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 mortgaged real property is no longer the primary residence of the mortgagor. If the mortgagor contacts the authorized lender and provides proof of residence or occupancy after such  visit  but  before  the  commencement of a foreclosure action, the authorized lender shall  be  barred  from  initiating  such  foreclosure action.  Furthermore,  no authorized lender shall charge a mortgagor 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  mortgage,  or any suspected or actual default condition.   7.  Both  the authorized lender and the mortgagor shall be represented by an attorney or attorneys at the time of the closing  on  the  reverse mortgage,  and  each such party shall have at least one attorney present to conduct the closing.    8. Any person who has been injured by reason of any violation of  this section  or  any  violation  of the rules and regulations of the federal Department of Housing and Urban Development relating to the home  equity conversion  mortgage  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 attorney's fees.   9. Compliance with the provisions of this section shall be  conditions precedent  to  commencing  an  action  to  foreclose  upon a home equity conversion mortgage which is subject to the provisions of this  section, and  the  failure  to  comply therewith shall be a complete defense to a foreclosure action.