New York passed a bill regulating reverse mortgages made pursuant to the home equity conversion mortgage (HECM) for seniors program operated by HUD.
Under the bill, lenders making HECM loans are required to provide all loan applicants or potential loan applicants with the telephone number and website address provided by HUD for the purpose of acquiring HECM counseling.
The bill also requires mandated notices and disclosures on each HECM periodic statement and requires notice to the borrower at the time the borrower’s home equity line of credit or life expectancy set aside is depleted to 10%, and again when the home equity line of credit or life expectancy set aside is depleted.
In addition, the bill prohibits lenders from engaging in unfair or deceptive practices related to the marketing or offering of HECMs, requires attorney representation at loan closing, and mandates verification of occupancy prior to instituting foreclosure on the basis the property is no longer occupied by the borrower.
The bill becomes effective March 5, 2020.
See the New York Assembly website for the full text of the Statutes:
https://nyassembly.gov/leg/?default_fld=&leg_video=&bn=A05626&term=2019&Summary=Y&Text=Y
