STATE OF NEW YORK ________________________________________________________________________ 5877 2023-2024 Regular Sessions IN ASSEMBLY March 23, 2023 ___________ Introduced by M. of A. WEPRIN -- read once and referred to the Committee on Banks 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: 1 Section 1. Section 280 of the real property law, as added by chapter 2 613 of the laws of 1993, paragraph (f) of subdivision 1 as amended by 3 chapter 155 of the laws of 2012, subdivision 5 as amended by chapter 33 4 of the laws of 1996, and paragraph (d) of subdivision 1, paragraphs (a), 5 (b), and (i), and the opening paragraph and subparagraph (v) of para- 6 graph (e) of subdivision 2, paragraph (b) of subdivision 3, and subdivi- 7 sions 4, 8, and 9 as further amended by section 104 of part A of chapter 8 62 of the laws of 2011, is amended to read as follows: 9 § 280. Reverse mortgage loans for persons [~~sixty~~] sixty-two years of 10 age or older. 1. For purposes of this section the following terms shall 11 have the following meanings: 12 (a) Reverse mortgage loans. A loan which is secured by a first mort- 13 gage on real property improved by a one- to four-family residence, coop- 14 erative apartment, life estate, trust, leasehold or condominium that is 15 the residence of the [~~mortgagor(s)~~] borrower or borrowers the proceeds 16 of which are advanced to the [~~mortgagor(s)~~] borrower or borrowers during 17 the term of the loan using any one or more method of payments in equal 18 monthly installments using tenure or term payments, in advances through 19 a line of credit or otherwise, in lump sums, or through a combination 20 thereof using a modified tenure or modified term payments. A reverse 21 mortgage loan may be FHA insured (HECM) pursuant to subdivision four of 22 this section or a non FHA insured loan (proprietary). EXPLANATION--Matter in italics (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD02974-01-3

A. 5877 2 1 (b) [~~Term reverse mortgage loan. Any reverse mortgage loan that has a~~ 2 ~~fixed term to maturity.~~ 3 ~~(c) Tenure reverse mortgage loan. Any reverse mortgage loan that does~~ 4 ~~not have a fixed term to maturity, but rather~~] Reverse mortgage maturi- 5 ty. A reverse mortgage matures solely upon contingent events, such as 6 events including but not limited to death [or] of the surviving borrow- 7 er, the real property securing the loan no longer being the [~~mortga-~~ 8 ~~gors'~~] borrowers' principal residence or the subject property being 9 sold. 10 [~~(d)~~] (c) Authorized lender. Any bank, trust company, national banking 11 association, savings bank, savings and loan association, federal savings 12 bank, federal savings and loan association, credit union, or federal 13 credit union or any licensed mortgage banker approved for the making of 14 reverse mortgage loans by the superintendent of financial services or 15 any entity exempted from licensing pursuant to section five hundred 16 ninety of the banking law and approved for the making of reverse mort- 17 gage loans by the superintendent of financial services. 18 [~~(e) Mortgagor.~~] (d) Borrower. A tenant in severalty who is [~~sixty~~] 19 sixty-two years of age or older, or if the real property is held by 20 tenants by the entirety or by joint tenancy, the youngest of which is 21 [~~sixty~~] sixty-two years of age or older and signs the loan application. 22 However, a party with a remainder interest who has not signed the appli- 23 cation but signs the mortgage, signs the mortgage as an accommodation 24 and not as a borrower as defined in this section. 25 [~~(f)~~] (e) Superintendent of financial services. The superintendent 26 established pursuant to section two hundred two of the financial 27 services law. 28 (f) Mortgagor. Mortgagor is one who signs the mortgage as a borrower 29 or as a non-borrower when one holds a remainder interest, or signs as a 30 trustee. 31 (g) Home equity conversion mortgage (HECM). The FHA reverse mortgage 32 loan under the department of housing and urban development. 33 (h) Tenure payment. Equal monthly payments are made by the lender to 34 the borrower or borrowers as long as property remains the principal 35 residence unless the loan becomes due pursuant to paragraph (c) of this 36 subdivision. 37 (i) Term payment. Equal monthly payments are made by the lender to the 38 borrower or borrowers for a fixed term of months chosen by the borrower, 39 unless the loan becomes due pursuant to paragraph (c) of this subdivi- 40 sion. 41 (j) Line of credit. Payments are made by the lender to the borrower at 42 times and in amounts determined by the borrower or borrowers, as long as 43 the property remains principal residence, unless the loan becomes due 44 pursuant to paragraph (c) of this subdivision. 45 (k) Modified tenure. A tenure plan combined with a line of credit 46 feature. 47 (l) Modified term. A term plan combined with a line of credit feature. 48 (m) Full draw. All available funds are taken in a one-time single 49 payment. 50 (n) Partial draw. A portion of the available funds are taken in a 51 single payment. 52 (o) Principal residence. The dwelling where the borrower maintains a 53 permanent place of abode and typically spends a majority of calendar 54 year. The property shall be considered to be the principal residence of 55 any borrower who is temporarily or permanently in a health care institu-

A. 5877 3 1 tion as long as the property is the principal residence of at least one 2 other borrower who is not in a health care institution. 3 (p) Proprietary reverse mortgage. A non FHA insured loan. 4 (q) Counselor. Shall be an individual who has met all testing and 5 education requirements of the department of housing and urban develop- 6 ment and is included in the HUD approved roster, as long as said roster 7 shall be maintained. 8 (r) Counseling protocol. Each counselor shall follow HUD's detailed 9 counseling protocol, as updated and amended from time to time. The coun- 10 seling protocol for all reverse mortgage loans, shall include among 11 other things a discussion of: client needs and circumstances; features 12 of a reverse mortgage loan; borrower responsibility under a reverse 13 mortgage loan; costs to obtain a reverse mortgage; financial and tax 14 implications; alternatives to a reverse mortgage loan; elder abuse 15 issues and warnings about potential reverse mortgage insurance fraud 16 schemes. As long as required by HUD, the certificate can be withheld if 17 the borrower is unable to answer five out of ten questions about reverse 18 mortgage basics, after an explanation of the concept has been stated by 19 the counselor. The counseling protocol can be delivered face to face or 20 over the phone, at the sole option of the borrower. 21 (s) Counseling certificate. The counselor shall issue a counseling 22 certificate upon the completion of the session by either hand delivery 23 or through the postal service. Among other things, the certificate shall 24 contain the original signature of the counselor; counselor's ID number, 25 and the length of time of the session. 26 2. A reverse mortgage loan pursuant to this section shall be subject 27 to the following: 28 (a) [~~the loan to value ratio shall be determined by the superintendent~~ 29 ~~of financial services; and~~ 30 ~~(b) subject to~~] such rules or regulations as the superintendent of 31 financial services shall adopt, any authorized lender or any successor 32 or assign of such authorized lender which suspends, ceases or makes late 33 payments to a [~~mortgagor~~] borrower under a reverse mortgage loan shall 34 be subject to forfeiture (as liquidated damages to such [~~mortgagor~~] 35 borrower and not as a penalty) of twice the interest which would other- 36 wise have been earned during the period in which payments were 37 suspended, ceased or made late, provided that said authorized lender or 38 any successor or assign of such authorized lender shall have the right 39 to make payments pursuant to said loan agreement within fifteen days of 40 each payment date, without penalty; and 41 [~~(c)~~] (b) the outstanding balance may be prepaid [~~in full~~] by the 42 [~~mortgagor~~] borrower without penalty at any time [~~during the term and/or~~ 43 ~~tenure of the loan~~]; provided, however, if said outstanding balance is 44 paid in full, the loan will be deemed satisfied and no longer be in 45 effect; and 46 [~~(d)~~] (c) an authorized lender is prohibited from using or attaching 47 any property or asset of the [~~mortgagor~~] borrower except the real prop- 48 erty, including a cooperative apartment, securing the reverse mortgage 49 loan in settlement of a reverse mortgage obligation; and 50 [~~(e)~~] (d) the authorized lender must deliver to [~~an applicant~~] a 51 borrower such disclosures as may be required by the superintendent of 52 financial services which shall describe the relevant portions of the 53 reverse mortgage being offered, and shall include but not be limited to 54 the following items: 55 (i) [~~except for a tenure reverse mortgage loan, a schedule of payments~~ 56 ~~to and from the mortgagor and the total payments in dollars over the~~

A. 5877 4 1 ~~term of the reverse mortgage loan for both the mortgagor and mortgagee~~ 2 ~~depending on the type of reverse mortgage loan being offered;~~ 3 ~~(ii)~~] a statement prominently displayed advising [~~applicants~~] borrow- 4 ers to consult with appropriate authorities regarding tax and estate 5 planning consequences of a reverse mortgage; 6 [~~(iii)~~] (ii) where applicable a description of prepayment and refi- 7 nancing features; 8 [~~(iv)~~] (iii) the interest rate and, except for a tenure reverse mort- 9 gage loan, the total interest payable on the loan; 10 [~~(v)~~] (iv) a statement concerning the compliance of the lender with 11 the criteria established by the superintendent of financial services 12 that an authorized lender must meet before it may make reverse mortgage 13 loans pursuant to this section; and 14 [~~(vi)~~] (v) a statement setting forth those events which would termi- 15 nate the reverse mortgage loan; and 16 [~~(f)~~] (e) in the event that an authorized lender or holder of the 17 reverse mortgage loan intends to initiate foreclosure proceedings the 18 [~~mortgagor~~] borrower shall have the right to designate a third party who 19 shall be notified. In the event that the mortgagor has not designated a 20 third party to receive such notice of foreclosure, then the authorized 21 lender or the holder of said reverse mortgage loan shall notify the 22 local or county office for the aging of its intent to commence foreclo- 23 sure proceedings. Such entity shall take appropriate action to protect 24 the interests of the [~~mortgagor~~] borrower; and 25 [~~(g)~~] (f) for all reverse mortgage loans an authorized lender must 26 deliver to the [~~applicant~~] borrower, upon application, if available, a 27 statement prepared by the local or county office for the aging on the 28 [~~advisability and~~] availability of independent counseling [~~and informa-~~ 29 ~~tion services~~]. Further, no reverse mortgage [~~commitment shall be issued~~ 30 ~~by an authorized lender~~] processing of this loan shall begin until the 31 [~~applicant presents, in writing, a statement that the terms of the~~ 32 ~~reverse mortgage loan have been explained by an attorney, a housing and~~ 33 ~~urban development certified counselor or any other counseling service as~~ 34 ~~indicated on the statement supplied by the county or local office for~~ 35 ~~the aging or a signed affidavit indicating that the applicant, although~~ 36 ~~made aware of the importance of counseling and its local availability~~ 37 ~~through the provision of such information by the authorized lender,~~ 38 ~~chooses not to utilize any of the aforementioned available services. The~~ 39 ~~form of such statement and affidavit shall be developed by the New York~~ 40 ~~state office for the aging~~] borrower provides to an authorized lender or 41 broker the original counseling certificate allowed under the Federal 42 Housing Administration (FHA) or other programs approved by the super- 43 intendent of financial services in consultation with the state office 44 for the aging; and 45 [~~(h)~~] (g) any such reverse mortgage shall expressly and conspicuously 46 bear a legend identifying it as such; and 47 [~~(i)~~] (h) subject to such rules or regulations as the superintendent 48 of financial services may adopt, a reverse mortgage loan shall be made 49 at either a fixed or variable rate of interest. 50 (i) The processing of a reverse mortgage shall include the ordering of 51 an appraisal, a title search and a credit report or an FHA case number, 52 when applicable. A reverse mortgage loan cannot be processed, nor shall 53 a borrower incur any processing expense until the borrower completes the 54 required counseling. The processing of a reverse mortgage loan may only 55 proceed once the counseling is complete, as evidenced by the signed and 56 dated counseling certificate.

A. 5877 5 1 3. A reverse mortgage loan pursuant to this section may: 2 (a) provide that the [~~mortgagor's~~] borrower's closing costs, including 3 but not limited to loan or commitment fees, if any, insurance premiums, 4 house repairs, legal fees, [~~the cost of annuities,~~] the costs of third- 5 party counseling, the costs of existing mortgages or liens, and other 6 appropriate costs be included in the principal of the reverse mortgage 7 loan and disbursed out of the loan proceeds at closing; 8 (b) provide for the maintenance of an escrow account by the authorized 9 lender for purposes of payment of real property taxes, insurance on the 10 property securing the loan, or any other fees and expenses as may be 11 permitted by superintendent of financial services regulation; 12 (c) provide that an authorized lender may, consistent with federal 13 laws and regulations, include a due-on-sale clause in its reverse mort- 14 gage loan agreement and at its option exercise and enforce such clause 15 in accordance with its terms. 16 (d) The borrower shall not be required by an authorized lender or 17 broker to purchase an insurance or annuity product as a requirement or 18 condition of eligibility except for title insurance, hazard insurance, 19 flood or other peril insurance or other such product that are customary 20 and normal to the transaction. 21 4. The superintendent of financial services shall adopt those rules or 22 regulations as it considers appropriate to govern reverse mortgage loans 23 made pursuant to this section. No reverse mortgage loan shall be made 24 unless it conforms to the requirements of this section and such rules 25 and regulations as the superintendent of financial services may adopt 26 [~~except those reverse mortgage loans made pursuant to section two~~ 27 ~~hundred eighty-a of this article~~]. A reverse mortgage loan made by any 28 authorized lender, national banking association, federal savings and 29 loan association or federal credit union in conformity with applicable 30 federal laws and regulations specifically regulating reverse mortgage 31 loans shall be deemed to conform to the requirements of this section 32 unless such reverse mortgage loan fails to conform to such rules and 33 regulations as the superintendent of financial services has expressly 34 declared to be neither preempted by, nor otherwise inconsistent with 35 such federal laws or regulations. Those rules or regulations shall 36 include, but are not limited to, the form and contents of any disclosure 37 statement, with the exception of the counseling statement prepared by 38 the New York state office for the aging pursuant to paragraph [~~(g)~~] (f) 39 of subdivision two of this section, that authorized lenders must provide 40 to [~~mortgagors~~] borrowers. 41 5. Notwithstanding any inconsistent provision of law, the priority of 42 the lien of a reverse mortgage, including the lien for all principal, 43 interest, fees, costs, shared appreciation and other charges assessed in 44 connection with the reverse mortgage, shall date from the recording of 45 the reverse mortgage irrespective of the date of any advance of reverse 46 mortgage loan proceeds or the date by which an authorized lender shall 47 be entitled to shared appreciation or accrued but unpaid interest, fees, 48 costs or other charges. 49 6. Nothing in this section shall be construed to limit, impair or 50 otherwise affect the priority under applicable law of any other mort- 51 gage, deed of trust, encumbrance or lien which was recorded or filed 52 prior to the effective date of this section. 53 7. The sale or transfer of the real property securing the reverse 54 mortgage loan [~~to a person other than an original mortgagor or mortga-~~ 55 ~~gors~~] shall result in the termination of the loan.

A. 5877 6 1 8. [~~In a term reverse mortgage loan, the real property securing the~~ 2 ~~reverse mortgage loan may be reappraised by an independent appraiser at~~ 3 ~~the end of the loan term. If the value of the real property has appreci-~~ 4 ~~ated, the term of the reverse mortgage may be extended or refinanced,~~ 5 ~~however, the total reverse mortgage loan amount may not exceed such~~ 6 ~~amount or ratio as may be determined by the superintendent of financial~~ 7 ~~services. The refinancing of the reverse mortgage loan shall be provided~~ 8 ~~by the original authorized lender or by any other authorized lender~~ 9 ~~designated by the mortgagee.~~ 10 ~~9. The principal, including any accrued but unpaid interest, of a~~ 11 ~~reverse mortgage loan agreement entered into pursuant to this section~~ 12 ~~may be insured by the mortgagor. If such insurance is purchased from or~~ 13 ~~otherwise provided by any agency of the state of New York the mortgagor~~ 14 ~~shall be granted the right, for a term reverse mortgage loan, to refi-~~ 15 ~~nance or extend the reverse mortgage loan at the end of the term,~~ 16 ~~subject to such rules or regulations as the superintendent of financial~~ 17 ~~services may adopt. The authorized lender shall have the option to~~ 18 ~~choose between refinancing or extending the reverse mortgage loan.~~ 19 ~~Subject to obtaining an adequate increase in the insurance and subject~~ 20 ~~to such rules and regulations as the superintendent of financial~~ 21 ~~services may adopt, the total reverse mortgage loan amount shall not~~ 22 ~~exceed such amount or loan to value ratio as may be determined by the~~ 23 ~~superintendent of financial services. The refinancing of the reverse~~ 24 ~~mortgage loan shall be provided by the original authorized lender or by~~ 25 ~~any other authorized lender designated by the mortgagee.~~ 26 ~~10. Any authorized lender offering reverse mortgage loans pursuant to~~ 27 ~~this section shall also offer reverse mortgage loans pursuant to section~~ 28 ~~two hundred eighty-a of this article. Subject to this section in the~~ 29 ~~event that an authorized lender makes reverse mortgage loans under this~~ 30 ~~section then that lender must make an equal number of reverse mortgage~~ 31 ~~loans pursuant to section two hundred eighty-a of this article. Such~~ 32 ~~loans shall be made to individuals who meet the requirements promulgated~~ 33 ~~in section two hundred eighty-a of this article provided that such indi-~~ 34 ~~vidual seeking the loan would otherwise qualify and be approved for that~~ 35 ~~loan. In the event that no or insufficient applications for reverse~~ 36 ~~mortgage loans pursuant to section two hundred eighty-a of this article~~ 37 ~~are made to a lender who has previously made reverse mortgage loans~~ 38 ~~pursuant to this section then there shall be no requirement for that~~ 39 ~~lender to make a reverse mortgage loan pursuant to section two hundred~~ 40 ~~eighty-a of this article. It shall also not be a requirement that an~~ 41 ~~authorized lender make any reverse mortgage loan to any individual who~~ 42 ~~would not qualify for such loan and/or would not otherwise be approved~~ 43 ~~for such loan.~~ 44 ~~11.~~] Nothing contained in this section, section six-h of the banking 45 law or any other provision of law shall be construed to prohibit a bank- 46 ing organization or licensed mortgage banker from providing reverse 47 mortgages to homeowners in this state under the federal housing adminis- 48 tration's home equity conversion mortgage insurance demonstration 49 program. 50 § 2. Section 280-a of the real property law is REPEALED. 51 § 3. Subdivision 1 of section 281 of the real property law, as amended 52 by chapter 613 of the laws of 1993, paragraph (a) as amended by chapter 53 183 of the laws of 1999, paragraph (b) as further amended by section 104 54 of part A of chapter 62 of the laws of 2011, is amended to read as 55 follows:

A. 5877 7 1 1. (a) For the purposes of this section, a "credit line mortgage" 2 shall mean any mortgage or deed of trust, other than a mortgage or deed 3 of trust made pursuant to a building loan contract as defined in subdi- 4 vision thirteen of section two of the lien law, which states that it 5 secures indebtedness under a note, credit agreement or other financing 6 agreement that reflects the fact that the parties reasonably contemplate 7 entering into a series of advances, payments and readvances, and that 8 limits the aggregate amount at any time outstanding to a maximum amount 9 specified in such mortgage or deed of trust. For purposes of this 10 section, "credit line mortgage" shall include a reverse mortgage loan as 11 defined in [~~sections~~] section two hundred eighty [~~and two hundred eight-~~ 12 ~~y-a~~] of this article except that such a credit line mortgage of the 13 reverse mortgage loan type shall not be subject to the twenty year limi- 14 tation set forth in subdivision two of this section. 15 (b) Payments made by an authorized lender pursuant to any credit line 16 reverse mortgage made in accordance with section two hundred [~~eighty-a~~] 17 eighty of this article during any one year shall be limited to such 18 amount or ratio as may be determined by the superintendent of financial 19 services. [~~In the event that a borrower does not take payment under~~ 20 ~~such credit line during the course of any year then that borrower shall~~ 21 ~~have the ability to increase the yearly payments by that amount avail-~~ 22 ~~able but not borrowed during previous years.~~] 23 § 4. The opening paragraph of section 6-h of the banking law, as 24 amended by chapter 613 of the laws of 1993, and as further amended by 25 section 104 of part A of chapter 62 of the laws of 2011, is amended to 26 read as follows: 27 Notwithstanding any inconsistent provision of law, in addition to any 28 other power exercised by it, every authorized lender, as defined by 29 section two hundred eighty [~~or two hundred eighty-a~~] of the real proper- 30 ty law, shall have the power to offer reverse mortgage loans (1) which 31 conform to the provisions of section two hundred eighty [~~or two hundred~~ 32 ~~eighty-a~~] of the real property law and the rules and regulations promul- 33 gated by the superintendent of financial services; or (2) which conform 34 to the requirements of the federal housing administration's home equity 35 conversion mortgage insurance [~~demonstration~~] program for as long as 36 such program exists as provided for in section 1715Z-20 of title 12 of 37 the United States Code. "Reverse mortgage" shall mean the mortgage, 38 deed of trust or other security instrument relating to a particular 39 reverse mortgage loan transaction. 40 § 5. Paragraph (s) of subdivision 1 of section 14 of the banking law, 41 as amended by section 90 of part A of chapter 62 of the laws of 2011, is 42 amended to read as follows: 43 (s) To permit authorized lenders, as defined by section two hundred 44 eighty [~~or two hundred eighty-a~~] of the real property law, to offer 45 reverse mortgage loans which shall conform to the provisions of section 46 two hundred eighty [~~or two hundred eighty-a~~] of the real property law. 47 § 6. The opening paragraph of paragraph 1 of subsection (c) of section 48 6501 of the insurance law, as amended by chapter 555 of the laws of 49 2003, is amended to read as follows: 50 an amortized instrument of indebtedness evidencing a loan secured by a 51 first lien on real estate which at the time the loan is made is not less 52 than eighty percent but not more than one hundred three percent of the 53 fair market value of the real estate with any percentage in excess of 54 one hundred percent being used to finance the fees and closing costs on 55 such indebtedness, except, however, for reverse mortgage loans made

A. 5877 8 1 pursuant to [~~sections~~] section two hundred eighty [~~and two hundred~~ 2 ~~eighty-a~~] of the real property law; provided that: 3 § 7. Subdivision 16 of section 2426 of the public authorities law, as 4 added by chapter 613 of the laws of 1993, is amended to read as follows: 5 16. Reverse mortgage. A reverse mortgage loan pursuant to section two 6 hundred eighty [~~or two hundred eighty-a~~] of the real property law shall 7 mean a loan which is secured by a first mortgage on real property 8 improved by a one to four-family residence or condominium or cooperative 9 apartment that is the residence of the [~~mortgagor~~] borrower, the 10 proceeds of which are advanced to the mortgagor during the loan term in 11 equal installments, in advances through a line of credit or otherwise, 12 in lump sums, or through a combination thereof. A reverse mortgage may 13 be structured to provide for the addition of accrued but unpaid interest 14 to principal, and mortgage insurance premium in the amount of one and 15 one-quarter percent of the outstanding balance remaining or such other 16 amount as may be required by the Federal Department of Housing and Urban 17 Development. Such reverse mortgage loan may provide for an initial lump- 18 sum advance wherein the mortgagor may receive an amount necessary to pay 19 closing costs, including but not limited to loan or commitment fees, if 20 any, insurance premiums, the cost of house repairs, legal fees, [~~the~~ 21 ~~cost of annuities,~~] the costs of third party counseling, the amount 22 necessary to pay off existing mortgages or liens, and other appropriate 23 costs. 24 § 8. Paragraph (b) of subdivision 3-b of section 2428 of the public 25 authorities law, as added by chapter 613 of the laws of 1993, and as 26 further amended by section 104 of part A of chapter 62 of the laws of 27 2011, is amended to read as follows: 28 (b) the reverse mortgage loan is issued pursuant to section two 29 hundred eighty [~~or two hundred eighty-a~~] of the real property law; 30 § 9. Subdivision 2 of section 252-a of the tax law, as amended by 31 chapter 613 of the laws of 1993, is amended to read as follows: 32 2. Reverse mortgages conforming to the provisions of section two 33 hundred eighty [~~or two hundred eighty-a~~] of the real property law secur- 34 ing obligations of mortgagors or exempted therefrom pursuant to subdivi- 35 sion four of section two hundred eighty [~~or subdivision four of section~~ 36 ~~two hundred eighty-a~~] of the real property law shall be exempt from any 37 tax or fee imposed by this article. In each case where an exemption is 38 claimed under this subdivision, the lender shall provide documentation 39 in a format approved by the commissioner [~~of taxation and finance~~] to 40 enable recording officers to affirmatively determine when a mortgage 41 being presented for recording is a reverse mortgage conforming to such 42 provisions of the real property law and entitled to an exemption under 43 this subdivision. Where such documentation is not furnished, the maximum 44 principal debt or obligation which shall be the measure of the tax 45 imposed by and pursuant to the authority of this article in the case of 46 a reverse mortgage shall be the proceeds of the loan which the author- 47 ized lender is obligated to lend the borrower at the execution of such 48 mortgage or at any time thereafter but determined without regard to any 49 contingency relating to the addition of any unpaid interest to principal 50 or relating to any percentage of the future appreciation of the property 51 securing the loan as consideration or additional consideration for the 52 making of the loan. Provided, however, if subsequent to the recording of 53 such mortgage, the proceeds which the authorized lender is obligated to 54 lend the borrower are increased at any time, such new or further indebt- 55 edness or obligation shall be the measure of the tax at such time unless

A. 5877 9 1 at that time an exemption is applicable under the first sentence of this 2 subdivision or otherwise. 3 § 10. Section 131-x of the social services law, as amended by section 4 73 of part B of chapter 436 of the laws of 1997, is amended to read as 5 follows: 6 § 131-x. Reverse mortgage loans. Notwithstanding any other incon- 7 sistent provisions of law and to the extent permissible under federal 8 law, regulation or waiver, the proceeds of a reverse mortgage loan made 9 in conformity with the requirements of section two hundred eighty [or 10 ~~two hundred eighty-a~~] of the real property law or exempted therefrom 11 pursuant to subdivision four of section two hundred eighty [~~or subdivi-~~ 12 ~~sion four of section two hundred eighty-a~~] of the real property law 13 shall not be considered as income or resources of the mortgagor for any 14 purpose under any law relating to food stamps, public assistance, veter- 15 an assistance, safety net assistance, low-income home energy assistance, 16 federal supplemental security income benefits and/or additional state 17 payments, medical assistance, any prescription drug plan or other 18 payments, allowances, benefits or services available pursuant to this 19 chapter; provided, however, that for applicants or for recipients of 20 safety net assistance, any such reverse mortgage loan proceeds shall be 21 disregarded as income and/or resources only in the event that, and for 22 so long as, federal laws and regulations exempt loan proceeds in the 23 determination of eligibility for both the aid to families with dependent 24 children and supplemental security income programs. 25 § 11. This act shall take effect immediately.

Relates to reverse mortgage loans; repealer

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