2020 New York Laws
RPP - Real Property
Article 8 - Conveyances and Mortgages
280-D - Federal Home Equity Conversion Mortgage Default and Foreclosure Regulation.

* §  280-d.  Federal  home  equity  conversion  mortgage  default  and
foreclosure regulation.  1.  For  the  purposes  of  this  section,  the
following terms shall have the following meanings:
  (a)  Reverse  mortgage  loan.  A  reverse  mortgage loan as defined in
section two hundred eighty of this article,  which  is  issued  in  this
state  pursuant  to  the  home  equity  conversion  mortgage for seniors
program  operated  by  the  federal  Department  of  Housing  and  Urban
Development.
  (b)  Authorized lender. An authorized lender as defined in section two
hundred eighty of this  article  authorized  to  make  reverse  mortgage
loans, as defined in this section.
  (c)  Department.  The  department  of  financial  services established
pursuant to section one hundred two of the financial services law.
  2. In the event of a default or foreclosure upon  a  reverse  mortgage
loan,  the  authorized  lender, upon the commencement of the foreclosure
proceeding, shall transmit to the  department  proof  that  the  federal
Department  of  Housing and Urban Development has granted prior approval
to accelerate the loan, proof of the default notice to the mortgagor and
any such information relating to the loans  and  the  mortgagor  as  the
department  shall  determine  to  be  necessary.  Upon  receipt  of such
information, the department shall  provide  notice  of  and  information
relating  to the foreclosure to the mortgagor. Such notice shall include
a notice of the  mortgagor's  rights  in  the  foreclosure  process  and
contact information for legal service organizations which may be able to
assist the mortgagor with the mortgage default and/or foreclosure.
  3.  No  reverse  mortgage  loan  commitment  shall  be  issued  by  an
authorized lender unless such commitment provides in writing notice that
the department will be provided notice of  any  default  or  foreclosure
upon the loan so as to provide assistance to the mortgagor.
  4.  No  authorized  lender  shall  make  an  advance  payment  for any
obligation arising from mortgaged real  property.  Furthermore,  in  the
event  a  mortgagor  defaults  upon  the  payment  of mortgage insurance
premium, homeowners insurance premium or real property  tax  related  to
the  mortgaged  property,  the  authorized  lender  may  only  pay those
premiums and/or taxes which are in arrears.
  5.  The  department  shall  issue  regulations  which  shall   require
mortgagees  to  engage  in  mandatory  loss  mitigation procedures to be
specified by the department.  These  loss  mitigation  procedures  shall
comply  with  any  restrictions on loss mitigation issued by the federal
Department of Housing and Urban Development for  reverse  mortgages  and
shall be updated when necessary to ensure compliance with federal rules.
The  mortgagee  shall  provide information to the department about loans
receiving such loss mitigation  assistance.  This  includes  maintaining
loan  level,  loss mitigation data and providing the department with the
following information for loans associated with a repayment plan:
  (a) monthly surplus income;
  (b) term of repayment plan;
  (c) amount of monthly repayment plan payment;
  (d) due date of next monthly payment;
  (e) when a mortgagor experiences a hardship; and
  (f) reason for hardship.
  6. Any person who has been injured by reason of any violation of  this
section may bring an action in his or her own name to recover treble his
or  her  actual  damages,  plus  the  prevailing  plaintiff's reasonable
attorney's fees.
  7. The requirements of this section shall be conditions  precedent  to
commencing an action to foreclose upon a home equity conversion mortgage

which  is  subject  to  the  provisions  of this section, and failure to
comply therewith shall be a complete defense to a foreclosure action.
  * NB Effective April 14, 2021