New York passed a bill enacting provisions with respect to reverse cooperative apartment unit loans. The provisions apply to reverse mortgage loans secured by a cooperative unit for persons 62 years of age or older. Under the bill, a number of requirements and restrictions with respect to reverse cooperative apartment unit loans are established, including requirements and restrictions with respect to: disclosures; counseling, loan advances; loan maturity; prepayment penalties; set-aside accounts and lender requirements (surety bonds, net worth, etc…).
In addition, the bill amends New York’s foreclosure law by:
- Requiring a notice of default be sent to the borrower of a reverse cooperative apartment unit loan prior to initiating foreclosure;
- Requiring the lender or servicer and the borrower of a reverse cooperative apartment unit loan participate in a settlement conference in the event a foreclosure action is commenced and the underlying default is not due to the borrower’s death or vacating of the cooperative unit; and
- Mandating the information that must be included in a foreclosure petition involving a reverse cooperative apartment unit loan if the underlying default is due to the borrower’s breach of the loan agreement and not due to the borrower’s death or vacating of the cooperative unit.
The bill becomes effective May 30, 2022.
Click to view the NY SB 76: https://www.tenaco.com/wp-content/uploads/2022/02/NY-SB-760-12-3-21.pdf
