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Sponsors
Senator · Senate District 7
No co-sponsors yet.
History
- Referred to judiciary
- Referred to judiciary
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Provides that a lender may receive not more than 20% of the future appreciation of property secured by a reverse mortgage granted to a person 60 years old or older
In Assembly Committee · Judiciary · Sponsor Herman D. Farrell
Full text
The text isn't available here yet. Check nysenate.gov.
Sponsor's memo
BILL NUMBER:S303
Title of bill
An act to amend the real property law, in relation to reverse mortgage loans for persons sixty years of age or older
Purpose
This bill will limit shared appreciation in revenue mortgage.
Summary of provisions
This bill would amend the real property law to limit the shared appreciation any authorized lender may receive no more than 20 per cent of the appreciation during the term of the mortgage.
Justification
In 1994, the Real Property Law was amended to formalize the reverse mortgage law in the State of New York. (Reverse mortgage allows senior citizens to take equity out of their homes which they are living there through equal installments, a line of credit or a lump sum).
Those mortgages are now being satisfied either by the mortgagor paying off the mortgage, selling the property themselves or through their estate.
Due to fluctuating market conditions and one side contacts, the Legislature has learned that certain mortgage lenders have, however, been misusing this valuable financial instrument to exact enormous unmerited profits. For example, when one individual mortgagor received a lump sum payment of$114,000, and the mortgagor had to sell the property just seven years later, the authorized lender issued a payout letter of $451 ,000. This included $113,000 in compounded interest and $223,000 of shared appreciation at the rate of 50%. With the real estate market experiencing historic fluctuations, this problem is becoming ever more of an issue.
This bill would attempt to remedy this usurious gouging by the authorized lender by reducing the shared appreciation from 50% to 20%. This would accordingly be a much more equitable distribution of the shared appreciation.
Legislative history
S.1078A of 2011 2008 - S.642 - Passed Senate 61-0
Fiscal implications
This bill would increase revenue to state and local governments by encouraging the issuance of reverse mortgages with fair returns and the marketability and sale of real property.
Effective date
This bill would take effect on the one hundred eightieth day after it shall have become a law.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.