New York passed a bill enacting loss mitigation and foreclosure notice requirements for reverse mortgages subject to the federal Home Equity Conversion Mortgage (HECM) program. Under the bill, a lender or servicer that commences a foreclosure action involving a HECM must provide to the Department of Financial Services (Department) the following: proof that HUD has granted approval to accelerate the loan; proof of delivery of the default notice to the borrower; and any other information relating the loan and borrower the Department deems necessary. The bill also requires the Department to issue regulations requiring lenders and servicers to engage in loss mitigation procedures in connection with HECMs, and provide information to the Department with respect to loans receiving loss mitigation assistance. In addition, the bill requires all commitments involving a HECM loan to include a notice stating that that the Department will be notified of any default or foreclosure upon the loan. The bill becomes effective April 14, 2021.
See the New York Assembly website for the full text of the Statutes: https://assembly.state.ny.us/leg/?bn=sb+4408
