S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  2805

                       2015-2016 Regular Sessions

                          I N  A S S E M B L Y

                            January 20, 2015
                               ___________

Introduced by M. of A. WEPRIN -- Multi-Sponsored by -- M. of A. BRENNAN,
  COLTON,  COOK,  CROUCH,  FARRELL,  GALEF,  HIKIND,  JAFFEE,  McKEVITT,
  MONTESANO, RIVERA, ROBERTS, SALADINO -- read once and referred to  the
  Committee on Housing

AN  ACT  to  amend the real property law, the banking law, the insurance
  law, the public authorities law, the tax law, and the social  services
  law,  in  relation  to  reverse  mortgage loans; and to repeal section
  280-a of the real property law relating thereto

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section  1.  Section 280 of the real property law, as added by chapter
613 of the laws of 1993, paragraph (f) of subdivision 1  as  amended  by
chapter  155 of the laws of 2012, subdivision 5 as amended by chapter 33
of the laws of 1996, and paragraph (d) of subdivision 1, paragraphs (a),
(b), and (i), and the opening paragraph and subparagraph  (v)  of  para-
graph (e) of subdivision 2, paragraph (b) of subdivision 3, and subdivi-
sions 4, 8, and 9 as further amended by section 104 of part A of chapter
62 of the laws of 2011, is amended to read as follows:
  S  280.  Reverse mortgage loans for persons [sixty] SIXTY-TWO years of
age or older.  1. For purposes of this section the following terms shall
have the following meanings:
  (a) Reverse mortgage loans. A loan which is secured by a  first  mort-
gage on real property improved by a one- to four-family residence, COOP-
ERATIVE  APARTMENT, LIFE ESTATE, TRUST, LEASEHOLD or condominium that is
the residence of the [mortgagor(s)] BORROWER OR BORROWERS  the  proceeds
of which are advanced to the [mortgagor(s)] BORROWER OR BORROWERS during
the  term  of the loan USING ANY ONE OR MORE METHOD OF PAYMENTS in equal
MONTHLY installments USING TENURE OR TERM PAYMENTS, in advances  through
a  line  of  credit or otherwise, in lump sums, or through a combination
thereof USING A MODIFIED TENURE OR MODIFIED  TERM  PAYMENTS.  A  REVERSE

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD07522-01-5

              

A. 2805                             2

MORTGAGE  LOAN MAY BE FHA INSURED (HECM) PURSUANT TO SUBDIVISION FOUR OF
THIS SECTION OR A NON FHA INSURED LOAN (PROPRIETARY).
  (b)  [Term reverse mortgage loan. Any reverse mortgage loan that has a
fixed term to maturity.
  (c) Tenure reverse mortgage loan. Any reverse mortgage loan that  does
not  have a fixed term to maturity, but rather] REVERSE MORTGAGE MATURI-
TY. A REVERSE MORTGAGE matures solely upon contingent  events,  such  as
events  including but not limited to death [or] OF THE SURVIVING BORROW-
ER, the real property securing the loan no  longer  being  the  [mortga-
gors']  BORROWERS'  principal  residence  OR  THE SUBJECT PROPERTY BEING
SOLD.
  [(d)] (C) Authorized lender. Any bank, trust company, national banking
association, savings bank, savings and loan association, federal savings
bank, federal savings and loan association,  credit  union,  or  federal
credit  union or any licensed mortgage banker approved for the making of
reverse mortgage loans by the superintendent of  financial  services  or
any  entity  exempted  from  licensing  pursuant to section five hundred
ninety of the banking law and approved for the making of  reverse  mort-
gage loans by the superintendent of financial services.
  [(e)  Mortgagor.]  (D)  BORROWER. A tenant in severalty who is [sixty]
SIXTY-TWO years of age or older, or if the  real  property  is  held  by
tenants  by  the  entirety or by joint tenancy, the youngest of which is
[sixty] SIXTY-TWO years of age or older AND SIGNS THE LOAN  APPLICATION.
HOWEVER, A PARTY WITH A REMAINDER INTEREST WHO HAS NOT SIGNED THE APPLI-
CATION  BUT  SIGNS  THE MORTGAGE, SIGNS THE MORTGAGE AS AN ACCOMMODATION
AND NOT AS A BORROWER AS DEFINED IN THIS SECTION.
  [(f)] (E) Superintendent of  financial  services.  The  superintendent
established  pursuant  to  section  two  hundred  two  of  the financial
services law.
  (F) MORTGAGOR. MORTGAGOR IS ONE WHO SIGNS THE MORTGAGE AS  A  BORROWER
OR  AS A NON-BORROWER WHEN ONE HOLDS A REMAINDER INTEREST, OR SIGNS AS A
TRUSTEE.
  (G) HOME EQUITY CONVERSION MORTGAGE (HECM). THE FHA  REVERSE  MORTGAGE
LOAN UNDER THE DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT.
  (H)  TENURE  PAYMENT. EQUAL MONTHLY PAYMENTS ARE MADE BY THE LENDER TO
THE BORROWER OR BORROWERS AS LONG  AS  PROPERTY  REMAINS  THE  PRINCIPAL
RESIDENCE  UNLESS THE LOAN BECOMES DUE PURSUANT TO PARAGRAPH (C) OF THIS
SUBDIVISION.
  (I) TERM PAYMENT. EQUAL MONTHLY PAYMENTS ARE MADE BY THE LENDER TO THE
BORROWER OR BORROWERS FOR A FIXED TERM OF MONTHS CHOSEN BY THE BORROWER,
UNLESS THE LOAN BECOMES DUE PURSUANT TO PARAGRAPH (C) OF  THIS  SUBDIVI-
SION.
  (J) LINE OF CREDIT. PAYMENTS ARE MADE BY THE LENDER TO THE BORROWER AT
TIMES AND IN AMOUNTS DETERMINED BY THE BORROWER OR BORROWERS, AS LONG AS
THE  PROPERTY  REMAINS  PRINCIPAL RESIDENCE, UNLESS THE LOAN BECOMES DUE
PURSUANT TO PARAGRAPH (C) OF THIS SUBDIVISION.
  (K) MODIFIED TENURE. A TENURE PLAN COMBINED  WITH  A  LINE  OF  CREDIT
FEATURE.
  (L) MODIFIED TERM. A TERM PLAN COMBINED WITH A LINE OF CREDIT FEATURE.
  (M)  FULL  DRAW.  ALL  AVAILABLE  FUNDS ARE TAKEN IN A ONE-TIME SINGLE
PAYMENT.
  (N) PARTIAL DRAW. A PORTION OF THE AVAILABLE  FUNDS  ARE  TAKEN  IN  A
SINGLE PAYMENT.
  (O)  PRINCIPAL  RESIDENCE. THE DWELLING WHERE THE BORROWER MAINTAINS A
PERMANENT PLACE OF ABODE AND TYPICALLY SPENDS  A  MAJORITY  OF  CALENDAR
YEAR.  THE PROPERTY SHALL BE CONSIDERED TO BE THE PRINCIPAL RESIDENCE OF

A. 2805                             3

ANY BORROWER WHO IS TEMPORARILY OR PERMANENTLY IN A HEALTH CARE INSTITU-
TION AS LONG AS THE PROPERTY IS THE PRINCIPAL RESIDENCE OF AT LEAST  ONE
OTHER BORROWER WHO IS NOT IN A HEALTH CARE INSTITUTION.
  (P) PROPRIETARY REVERSE MORTGAGE. A NON FHA INSURED LOAN.
  (Q)  COUNSELOR.  SHALL  BE  AN  INDIVIDUAL WHO HAS MET ALL TESTING AND
EDUCATION REQUIREMENTS OF THE DEPARTMENT OF HOUSING AND  URBAN  DEVELOP-
MENT  AND IS INCLUDED IN THE HUD APPROVED ROSTER, AS LONG AS SAID ROSTER
SHALL BE MAINTAINED.
  (R) COUNSELING PROTOCOL. EACH COUNSELOR SHALL  FOLLOW  HUD'S  DETAILED
COUNSELING PROTOCOL, AS UPDATED AND AMENDED FROM TIME TO TIME. THE COUN-
SELING  PROTOCOL  FOR  ALL  REVERSE  MORTGAGE LOANS, SHALL INCLUDE AMONG
OTHER THINGS A DISCUSSION OF: CLIENT NEEDS AND  CIRCUMSTANCES;  FEATURES
OF  A  REVERSE  MORTGAGE  LOAN;  BORROWER RESPONSIBILITY UNDER A REVERSE
MORTGAGE LOAN; COSTS TO OBTAIN A REVERSE  MORTGAGE;  FINANCIAL  AND  TAX
IMPLICATIONS;  ALTERNATIVES  TO  A  REVERSE  MORTGAGE  LOAN; ELDER ABUSE
ISSUES AND WARNINGS ABOUT POTENTIAL  REVERSE  MORTGAGE  INSURANCE  FRAUD
SCHEMES.  AS LONG AS REQUIRED BY HUD, THE CERTIFICATE CAN BE WITHHELD IF
THE BORROWER IS UNABLE TO ANSWER FIVE OUT OF TEN QUESTIONS ABOUT REVERSE
MORTGAGE BASICS, AFTER AN EXPLANATION OF THE CONCEPT HAS BEEN STATED  BY
THE  COUNSELOR. THE COUNSELING PROTOCOL CAN BE DELIVERED FACE TO FACE OR
OVER THE PHONE, AT THE SOLE OPTION OF THE BORROWER.
  (S) COUNSELING CERTIFICATE. THE COUNSELOR  SHALL  ISSUE  A  COUNSELING
CERTIFICATE  UPON  THE COMPLETION OF THE SESSION BY EITHER HAND DELIVERY
OR THROUGH THE POSTAL SERVICE. AMONG OTHER THINGS, THE CERTIFICATE SHALL
CONTAIN THE ORIGINAL SIGNATURE OF THE COUNSELOR; COUNSELOR'S ID  NUMBER,
AND THE LENGTH OF TIME OF THE SESSION.
  2.  A  reverse mortgage loan pursuant to this section shall be subject
to the following:
  (a) [the loan to value ratio shall be determined by the superintendent
of financial services; and
  (b) subject to] such rules or regulations  as  the  superintendent  of
financial  services  shall adopt, any authorized lender or any successor
or assign of such authorized lender which suspends, ceases or makes late
payments to a [mortgagor] BORROWER under a reverse mortgage  loan  shall
be  subject  to  forfeiture  (as  liquidated damages to such [mortgagor]
BORROWER and not as a penalty) of twice the interest which would  other-
wise  have  been  earned  during  the  period  in  which  payments  were
suspended, ceased or made late, provided that said authorized lender  or
any  successor  or assign of such authorized lender shall have the right
to make payments pursuant to said loan agreement within fifteen days  of
each payment date, without penalty; and
  [(c)]  (B)  the  outstanding  balance  may be prepaid [in full] by the
[mortgagor] BORROWER without penalty at any time [during the term and/or
tenure of the loan]; PROVIDED, HOWEVER, IF SAID OUTSTANDING  BALANCE  IS
PAID  IN  FULL,  THE  LOAN  WILL BE DEEMED SATISFIED AND NO LONGER BE IN
EFFECT; and
  [(d)] (C) an authorized lender is prohibited from using  or  attaching
any  property or asset of the [mortgagor] BORROWER except the real prop-
erty, INCLUDING A COOPERATIVE APARTMENT, securing the  reverse  mortgage
loan in settlement of a reverse mortgage obligation; and
  [(e)]  (D)  the  authorized  lender  must  deliver to [an applicant] A
BORROWER such disclosures as may be required by  the  superintendent  of
financial  services  which  shall  describe the relevant portions of the
reverse mortgage being offered, and shall include but not be limited  to
the following items:

A. 2805                             4

  (i) [except for a tenure reverse mortgage loan, a schedule of payments
to  and  from  the  mortgagor and the total payments in dollars over the
term of the reverse mortgage loan for both the mortgagor  and  mortgagee
depending on the type of reverse mortgage loan being offered;
  (ii)]  a statement prominently displayed advising [applicants] BORROW-
ERS to consult with appropriate authorities  regarding  tax  and  estate
planning consequences of a reverse mortgage;
  [(iii)]  (II)  where  applicable a description of prepayment and refi-
nancing features;
  [(iv)] (III) the interest rate and, except for a tenure reverse  mort-
gage loan, the total interest payable on the loan;
  [(v)]  (IV)  a  statement concerning the compliance of the lender with
the criteria established by the  superintendent  of  financial  services
that  an authorized lender must meet before it may make reverse mortgage
loans pursuant to this section; and
  [(vi)] (V) a statement setting forth those events which  would  termi-
nate the reverse mortgage loan; and
  [(f)]  (E)  in  the  event  that an authorized lender or holder of the
reverse mortgage loan intends to initiate  foreclosure  proceedings  the
[mortgagor] BORROWER shall have the right to designate a third party who
shall be notified.  In the event that the mortgagor has not designated a
third  party  to receive such notice of foreclosure, then the authorized
lender or the holder of said reverse  mortgage  loan  shall  notify  the
local  or county office for the aging of its intent to commence foreclo-
sure proceedings.  Such entity shall take appropriate action to  protect
the interests of the [mortgagor] BORROWER; and
  [(g)]  (F)  FOR  ALL  REVERSE MORTGAGE LOANS an authorized lender must
deliver to the [applicant] BORROWER, upon application, if  available,  a
statement  prepared  by  the local or county office for the aging on the
[advisability and] availability of independent counseling [and  informa-
tion services]. Further, no reverse mortgage [commitment shall be issued
by  an  authorized lender] PROCESSING OF THIS LOAN SHALL BEGIN until the
[applicant presents, in writing, a  statement  that  the  terms  of  the
reverse  mortgage loan have been explained by an attorney, a housing and
urban development certified counselor or any other counseling service as
indicated on the statement supplied by the county or  local  office  for
the  aging or a signed affidavit indicating that the applicant, although
made aware of the importance of counseling and  its  local  availability
through  the  provision  of  such  information by the authorized lender,
chooses not to utilize any of the aforementioned available services. The
form of such statement and affidavit shall be developed by the New  York
state office for the aging] BORROWER PROVIDES TO AN AUTHORIZED LENDER OR
BROKER  THE  ORIGINAL  COUNSELING  CERTIFICATE ALLOWED UNDER THE FEDERAL
HOUSING ADMINISTRATION (FHA) OR OTHER PROGRAMS APPROVED  BY  THE  SUPER-
INTENDENT  OF  FINANCIAL  SERVICES IN CONSULTATION WITH THE STATE OFFICE
FOR THE AGING; and
  [(h)] (G) any such reverse mortgage shall expressly and  conspicuously
bear a legend identifying it as such; and
  [(i)]  (H)  subject to such rules or regulations as the superintendent
of financial services may adopt, a reverse mortgage loan shall  be  made
at either a fixed or variable rate of interest.
  (I) THE PROCESSING OF A REVERSE MORTGAGE SHALL INCLUDE THE ORDERING OF
AN  APPRAISAL, A TITLE SEARCH AND A CREDIT REPORT OR AN FHA CASE NUMBER,
WHEN APPLICABLE. A REVERSE MORTGAGE LOAN CANNOT BE PROCESSED, NOR  SHALL
A BORROWER INCUR ANY PROCESSING EXPENSE UNTIL THE BORROWER COMPLETES THE
REQUIRED  COUNSELING. THE PROCESSING OF A REVERSE MORTGAGE LOAN MAY ONLY

A. 2805                             5

PROCEED ONCE THE COUNSELING IS COMPLETE, AS EVIDENCED BY THE SIGNED  AND
DATED COUNSELING CERTIFICATE.
  3. A reverse mortgage loan pursuant to this section may:
  (a) provide that the [mortgagor's] BORROWER'S closing costs, including
but  not limited to loan or commitment fees, if any, insurance premiums,
house repairs, legal fees, [the cost of annuities,] the costs of  third-
party  counseling,  the  costs of existing mortgages or liens, and other
appropriate costs be included in the principal of the  reverse  mortgage
loan and disbursed out of the loan proceeds at closing;
  (b) provide for the maintenance of an escrow account by the authorized
lender  for purposes of payment of real property taxes, insurance on the
property securing the loan, or any other fees and  expenses  as  may  be
permitted by superintendent of financial services regulation;
  (c)  provide  that  an  authorized lender may, consistent with federal
laws and regulations, include a due-on-sale clause in its reverse  mort-
gage  loan  agreement and at its option exercise and enforce such clause
in accordance with its terms.
  (D) THE BORROWER SHALL NOT BE REQUIRED  BY  AN  AUTHORIZED  LENDER  OR
BROKER  TO  PURCHASE AN INSURANCE OR ANNUITY PRODUCT AS A REQUIREMENT OR
CONDITION OF ELIGIBILITY EXCEPT FOR TITLE INSURANCE,  HAZARD  INSURANCE,
FLOOD  OR OTHER PERIL INSURANCE OR OTHER SUCH PRODUCT THAT ARE CUSTOMARY
AND NORMAL TO THE TRANSACTION.
  4. The superintendent of financial services shall adopt those rules or
regulations as it considers appropriate to govern reverse mortgage loans
made pursuant to this section. No reverse mortgage loan  shall  be  made
unless  it  conforms  to the requirements of this section and such rules
and regulations as the superintendent of financial  services  may  adopt
[except  those  reverse  mortgage  loans  made  pursuant  to section two
hundred eighty-a of this article]. A reverse mortgage loan made  by  any
authorized  lender,  national  banking  association, federal savings and
loan association or federal credit union in conformity  with  applicable
federal  laws  and  regulations specifically regulating reverse mortgage
loans shall be deemed to conform to the  requirements  of  this  section
unless  such  reverse  mortgage  loan fails to conform to such rules and
regulations as the superintendent of financial  services  has  expressly
declared  to  be  neither  preempted by, nor otherwise inconsistent with
such federal laws or  regulations.  Those  rules  or  regulations  shall
include, but are not limited to, the form and contents of any disclosure
statement,  with  the  exception of the counseling statement prepared by
the New York state office for the aging pursuant to paragraph [(g)]  (F)
of subdivision two of this section, that authorized lenders must provide
to [mortgagors] BORROWERS.
  5.  Notwithstanding any inconsistent provision of law, the priority of
the lien of a reverse mortgage, including the lien  for  all  principal,
interest, fees, costs, shared appreciation and other charges assessed in
connection  with  the reverse mortgage, shall date from the recording of
the reverse mortgage irrespective of the date of any advance of  reverse
mortgage  loan  proceeds or the date by which an authorized lender shall
be entitled to shared appreciation or accrued but unpaid interest, fees,
costs or other charges.
  6. Nothing in this section shall be  construed  to  limit,  impair  or
otherwise  affect  the  priority under applicable law of any other mort-
gage, deed of trust, encumbrance or lien which  was  recorded  or  filed
prior to the effective date of this section.

A. 2805                             6

  7.  The  sale  or  transfer  of the real property securing the reverse
mortgage loan [to a person other than an original mortgagor  or  mortga-
gors] shall result in the termination of the loan.
  8.  [In  a  term reverse mortgage loan, the real property securing the
reverse mortgage loan may be reappraised by an independent appraiser  at
the end of the loan term. If the value of the real property has appreci-
ated,  the  term  of the reverse mortgage may be extended or refinanced,
however, the total reverse mortgage loan  amount  may  not  exceed  such
amount  or ratio as may be determined by the superintendent of financial
services. The refinancing of the reverse mortgage loan shall be provided
by the original authorized lender or  by  any  other  authorized  lender
designated by the mortgagee.
  9.  The  principal,  including  any  accrued but unpaid interest, of a
reverse mortgage loan agreement entered into pursuant  to  this  section
may  be insured by the mortgagor. If such insurance is purchased from or
otherwise provided by any agency of the state of New York the  mortgagor
shall  be  granted the right, for a term reverse mortgage loan, to refi-
nance or extend the reverse mortgage  loan  at  the  end  of  the  term,
subject  to such rules or regulations as the superintendent of financial
services may adopt. The authorized  lender  shall  have  the  option  to
choose  between  refinancing  or  extending  the  reverse mortgage loan.
Subject to obtaining an adequate increase in the insurance  and  subject
to  such  rules  and  regulations  as  the  superintendent  of financial
services may adopt, the total reverse mortgage  loan  amount  shall  not
exceed  such  amount  or loan to value ratio as may be determined by the
superintendent of financial services. The  refinancing  of  the  reverse
mortgage  loan shall be provided by the original authorized lender or by
any other authorized lender designated by the mortgagee.
  10. Any authorized lender offering reverse mortgage loans pursuant  to
this section shall also offer reverse mortgage loans pursuant to section
two  hundred  eighty-a  of  this article. Subject to this section in the
event that an authorized lender makes reverse mortgage loans under  this
section  then  that lender must make an equal number of reverse mortgage
loans pursuant to section two hundred eighty-a  of  this  article.  Such
loans shall be made to individuals who meet the requirements promulgated
in section two hundred eighty-a of this article provided that such indi-
vidual seeking the loan would otherwise qualify and be approved for that
loan.  In  the  event  that  no or insufficient applications for reverse
mortgage loans pursuant to section two hundred eighty-a of this  article
are  made  to  a  lender  who has previously made reverse mortgage loans
pursuant to this section then there shall be  no  requirement  for  that
lender  to  make a reverse mortgage loan pursuant to section two hundred
eighty-a of this article. It shall also not be  a  requirement  that  an
authorized  lender  make any reverse mortgage loan to any individual who
would not qualify for such loan and/or would not otherwise  be  approved
for such loan.
  11.]  Nothing  contained in this section, section six-h of the banking
law or any other provision of law shall be construed to prohibit a bank-
ing organization or licensed  mortgage  banker  from  providing  reverse
mortgages to homeowners in this state under the federal housing adminis-
tration's   home  equity  conversion  mortgage  insurance  demonstration
program.
  S 2. Section 280-a of the real property law is REPEALED.
  S 3. Subdivision 1 of section 281 of the real property law, as amended
by chapter 613 of the laws of 1993, paragraph (a) as amended by  chapter
183 of the laws of 1999, paragraph (b) as further amended by section 104

A. 2805                             7

of  part  A  of  chapter  62  of the laws of 2011, is amended to read as
follows:
  1.    (a)  For  the purposes of this section, a "credit line mortgage"
shall mean any mortgage or deed of trust, other than a mortgage or  deed
of  trust made pursuant to a building loan contract as defined in subdi-
vision thirteen of section two of the lien law,  which  states  that  it
secures  indebtedness  under a note, credit agreement or other financing
agreement that reflects the fact that the parties reasonably contemplate
entering into a series of advances, payments and  readvances,  and  that
limits  the aggregate amount at any time outstanding to a maximum amount
specified in such mortgage or  deed  of  trust.  For  purposes  of  this
section, "credit line mortgage" shall include a reverse mortgage loan as
defined in [sections] SECTION two hundred eighty [and two hundred eight-
y-a]  of  this  article  except  that such a credit line mortgage of the
reverse mortgage loan type shall not be subject to the twenty year limi-
tation set forth in subdivision two of this section.
  (b) Payments made by an authorized lender pursuant to any credit  line
reverse  mortgage made in accordance with section two hundred [eighty-a]
EIGHTY of this article during any one year  shall  be  limited  to  such
amount  or ratio as may be determined by the superintendent of financial
services.  [In the event that a borrower does  not  take  payment  under
such  credit line during the course of any year then that borrower shall
have the ability to increase the yearly payments by that  amount  avail-
able but not borrowed during previous years.]
  S  4.  The  opening  paragraph  of  section 6-h of the banking law, as
amended by chapter 613 of the laws of 1993, and as  further  amended  by
section  104  of part A of chapter 62 of the laws of 2011, is amended to
read as follows:
  Notwithstanding any inconsistent provision of law, in addition to  any
other  power  exercised  by  it,  every authorized lender, as defined by
section two hundred eighty [or two hundred eighty-a] of the real proper-
ty law, shall have the power to offer reverse mortgage loans  (1)  which
conform  to the provisions of section two hundred eighty [or two hundred
eighty-a] of the real property law and the rules and regulations promul-
gated by the superintendent of financial services; or (2) which  conform
to  the requirements of the federal housing administration's home equity
conversion mortgage insurance [demonstration] program  for  as  long  as
such  program  exists as provided for in section 1715Z-20 of title 12 of
the United States Code.   "Reverse mortgage" shall  mean  the  mortgage,
deed  of  trust  or  other  security instrument relating to a particular
reverse mortgage loan transaction.
  S 5. Paragraph (s) of subdivision 1 of section 14 of the banking  law,
as amended by section 90 of part A of chapter 62 of the laws of 2011, is
amended to read as follows:
  (s)  To  permit  authorized lenders, as defined by section two hundred
eighty [or two hundred eighty-a] of the  real  property  law,  to  offer
reverse  mortgage loans which shall conform to the provisions of section
two hundred eighty [or two hundred eighty-a] of the real property law.
  S 6. The opening paragraph of paragraph 1 of subsection (c) of section
6501 of the insurance law, as amended by chapter  555  of  the  laws  of
2003, is amended to read as follows:
  an amortized instrument of indebtedness evidencing a loan secured by a
first lien on real estate which at the time the loan is made is not less
than  eighty  percent but not more than one hundred three percent of the
fair market value of the real estate with any percentage  in  excess  of
one  hundred percent being used to finance the fees and closing costs on

A. 2805                             8

such indebtedness, except, however,  for  reverse  mortgage  loans  made
pursuant  to  [sections]  SECTION  two  hundred  eighty [and two hundred
eighty-a] of the real property law; provided that:
  S  7. Subdivision 16 of section 2426 of the public authorities law, as
added by chapter 613 of the laws of 1993, is amended to read as follows:
  16. Reverse mortgage. A reverse mortgage loan pursuant to section  two
hundred  eighty [or two hundred eighty-a] of the real property law shall
mean a loan which is secured  by  a  first  mortgage  on  real  property
improved by a one to four-family residence or condominium OR COOPERATIVE
APARTMENT  that  is  the  residence  of  the  [mortgagor]  BORROWER, the
proceeds of which are advanced to the mortgagor during the loan term  in
equal  installments,  in advances through a line of credit or otherwise,
in lump sums, or through a combination thereof. A reverse  mortgage  may
be structured to provide for the addition of accrued but unpaid interest
to  principal,  AND  MORTGAGE INSURANCE PREMIUM IN THE AMOUNT OF ONE AND
ONE-QUARTER PERCENT OF THE OUTSTANDING BALANCE REMAINING OR  SUCH  OTHER
AMOUNT AS MAY BE REQUIRED BY THE FEDERAL DEPARTMENT OF HOUSING AND URBAN
DEVELOPMENT. Such reverse mortgage loan may provide for an initial lump-
sum advance wherein the mortgagor may receive an amount necessary to pay
closing  costs, including but not limited to loan or commitment fees, if
any, insurance premiums, the cost of house  repairs,  legal  fees,  [the
cost  of  annuities,]  the  costs  of third party counseling, the amount
necessary to pay off existing mortgages or liens, and other  appropriate
costs.
  S  8.  Paragraph  (b) of subdivision 3-b of section 2428 of the public
authorities law, as added by chapter 613 of the laws  of  1993,  and  as
further  amended  by  section 104 of part A of chapter 62 of the laws of
2011, is amended to read as follows:
  (b) the reverse mortgage  loan  is  issued  pursuant  to  section  two
hundred eighty [or two hundred eighty-a] of the real property law;
  S  9.  Subdivision  2  of  section 252-a of the tax law, as amended by
chapter 613 of the laws of 1993, is amended to read as follows:
  2. Reverse mortgages conforming  to  the  provisions  of  section  two
hundred eighty [or two hundred eighty-a] of the real property law secur-
ing obligations of mortgagors or exempted therefrom pursuant to subdivi-
sion  four of section two hundred eighty [or subdivision four of section
two hundred eighty-a] of the real property law shall be exempt from  any
tax  or  fee imposed by this article. In each case where an exemption is
claimed under this subdivision, the lender shall  provide  documentation
in  a  format  approved by the commissioner [of taxation and finance] to
enable recording officers to affirmatively  determine  when  a  mortgage
being  presented  for recording is a reverse mortgage conforming to such
provisions of the real property law and entitled to an  exemption  under
this subdivision. Where such documentation is not furnished, the maximum
principal  debt  or  obligation  which  shall  be the measure of the tax
imposed by and pursuant to the authority of this article in the case  of
a  reverse  mortgage shall be the proceeds of the loan which the author-
ized lender is obligated to lend the borrower at the execution  of  such
mortgage  or at any time thereafter but determined without regard to any
contingency relating to the addition of any unpaid interest to principal
or relating to any percentage of the future appreciation of the property
securing the loan as consideration or additional consideration  for  the
making of the loan. Provided, however, if subsequent to the recording of
such  mortgage, the proceeds which the authorized lender is obligated to
lend the borrower are increased at any time, such new or further indebt-
edness or obligation shall be the measure of the tax at such time unless

A. 2805                             9

at that time an exemption is applicable under the first sentence of this
subdivision or otherwise.
  S  10. Section 131-x of the social services law, as amended by section
73 of part B of chapter 436 of the laws of 1997, is amended to  read  as
follows:
  S  131-x.  Reverse  mortgage  loans.  Notwithstanding any other incon-
sistent  provisions  of  law and to the extent permissible under federal
law, regulation or waiver, the proceeds of a reverse mortgage loan  made
in  conformity  with  the requirements of section two hundred eighty [or
two hundred eighty-a] of the real property  law  or  exempted  therefrom
pursuant  to subdivision four of section two hundred eighty [or subdivi-
sion four of section two hundred eighty-a]  of  the  real  property  law
shall  not be considered as income or resources of the mortgagor for any
purpose under any law relating to food stamps, public assistance, veter-
an assistance, safety net assistance, low-income home energy assistance,
federal supplemental security income benefits  and/or  additional  state
payments,  medical  assistance,  any  prescription  drug  plan  or other
payments, allowances, benefits or services available  pursuant  to  this
chapter;  provided,  however,  that  for applicants or for recipients of
safety net assistance, any such reverse mortgage loan proceeds shall  be
disregarded   as income and/or resources only in the event that, and for
so long as, federal laws and regulations exempt  loan  proceeds  in  the
determination of eligibility for both the aid to families with dependent
children and supplemental security income programs.
  S 11. This act shall take effect immediately.