New York Laws
Article 8 - Conveyances and Mortgages
280-A - Reverse Mortgage Loans for Persons Seventy Years of Age or Older.

(a) Reverse mortgage loan. A loan which is secured by a first mortgage
on real property improved by a one to four-family residence or
condominium that is the residence of the mortgagor(s) the proceeds of
which are advanced to the mortgagor(s) during the term of the loan in
equal installments, or in advances through a line of credit or
otherwise, in lump sums, or through a combination thereof.
(b) Term reverse mortgage loan. As used in this section, any reverse
mortgage loan that has a fixed term for payments to the mortgagor(s).
(c) Tenure reverse mortgage loan. As used in this section, any reverse
mortgage loan that does not have a fixed term for payments to the
mortgagor(s).
(d) 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
mortgage loans by the superintendent of financial services.
(e) Mortgagor. A tenant in severalty who is seventy 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 seventy years of age or older
and whose income does not exceed eighty percent of the median income of
the county in which he or she resides.
(f) Superintendent of financial services. The superintendent
established pursuant to section two hundred two of the financial
services law.
2. A reverse mortgage loan pursuant to this section shall be subject
to the following:
(a) the mortgagor shall be granted lifetime possession of the subject
premises of the real property which is the security for the reverse
mortgage loan, as long as such real property remains the mortgagors'
principal residence and subject to a limited waiver of the right of
foreclosure as determined by the superintendent of financial services;
and
(b) the term of the reverse mortgage, except for a tenure reverse
mortgage loan, shall be for a period of ten years or less; and
(c) the loan to value ratio shall be determined by the superintendent
of financial services; and
(d) subject to such rules or regulations as the superintendent of
financial services shall adopt, for that period of time commencing at
the end of the loan term or ten years after the reverse mortgage loan
commences, whichever occurs first, and ending at such time as the
reverse mortgage loan is paid in full, the authorized lender, at its
option, may receive no more than twenty percent of the future
appreciation of the property securing the reverse mortgage loan as full
or partial consideration for the making of a reverse mortgage loan;
provided, however, that such future appreciation shall be limited by
such rules and regulations as the superintendent of financial services
may adopt or the authorized lender may charge a fixed rate of interest
on the outstanding balance of monies advanced under the reverse mortgage
agreement or any combination thereof. Said reverse mortgage loan shall
not come due and shall be extended until the voluntary relinquishment by
the mortgagors of possessory interest in such real property, the real
property no longer being the mortgagors' principal residence, the death

of the mortgagors, or such other events as may be determined by the
superintendent of financial services. Any such appreciation shall not be
considered interest for the purposes of any law regulating the maximum
rate of interest which may be charged, taken or received including
sections 190.40 and 190.42 of the penal law; and
(e) the authorized lender shall maintain an escrow account for the
purposes of paying real property taxes, insurance premiums of the
property securing the reverse mortgage loan, or for the payment of any
other fees and expenses as may be permitted by the superintendent of
financial services regulation; and
(f) subject to such rules or regulations as the superintendent of
financial services may adopt, an authorized lender or any successor or
assign of such authorized lender which may suspends, ceases or makes
late payments to a mortgagor under a reverse mortgage loan shall be
subject to forfeiture (as liquidated damages to such mortgagor and not
as a penalty) of twice the interest which would otherwise 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
(g) an authorized lender must deliver to an applicant 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:
(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 to consult
with appropriate authorities regarding tax and estate planning
consequences of a reverse mortgage;
(iii) where applicable a description of prepayment and refinancing
features;
(iv) to the extent determinable at or prior to the inception of the
reverse mortgage loan, the interest rate and, except for a tenure
reverse mortgage loan, the total interest payable on the reverse
mortgage loan;
(v) 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) a statement setting forth those events which would terminate the
reverse mortgage loan; and
(h) the outstanding balance may be prepaid in full by the mortgagor
without penalty at any time during the reverse mortgage loan term; and
(i) an authorized lender is prohibited from using or attaching any
property or asset of the mortgagor except the real property securing the
reverse mortgage loan in settlement of a reverse mortgage obligation;
and
(j) an authorized lender must deliver to the applicant 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 information services. Further, no reverse mortgage
commitment shall be issued by the authorized lender until the applicant
presents, in writing, a statement that the terms of the reverse mortgage
loan have been explained to them 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; and
(k) a reverse mortgage pursuant to this section shall expressly and
conspicuously bear a legend identifying it as such; and
(l) 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; and
(m) in the event that an authorized lender or holder of the reverse
mortgage loan intends to initiate foreclosure proceedings the mortgagor
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 foreclosure proceedings.
Such entity shall take appropriate action to protect the interests of
the mortgagor.
3. A reverse mortgage loan pursuant to this section may:
(a) provide that an authorized lender may, consistent with federal
laws and regulations, include a due-on-sale clause in its reverse
mortgage loan agreement and at its option exercise and enforce such
clause in accordance with its terms;
(b) provide that the mortgagor's closing costs, including but not
limited to loan or commitment fees if any, insurance premiums, house
repairs, legal fees, the costs 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.
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 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:
(a) any limitations on the taking of a percentage of the future
appreciation of the real property securing the reverse mortgage loan as
consideration for making the reverse mortgage loan;
(b) the execution by an authorized lender of a limited waiver of the
right of foreclosure;
(c) with the exception of the counseling statement prepared by the New
York state office for the aging pursuant to paragraph (j) of subdivision
two of this section, the form and contents of any disclosure statement
that authorized lenders must provide to mortgagors.

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 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
mortgage, deed of trust, encumbrance or lien which was recorded or filed
prior to the effective date of this section.
7. The sale or transfer of the real estate securing the reverse
mortgage loan to a person other than an original mortgagor or mortgagors
shall result in the termination of the reverse mortgage loan.
8. In a term reverse mortgage loan, the real property securing the
reverse mortgage may be reappraised by an independent appraiser at the
end of the loan term. If the value of the property has appreciated, the
term of the reverse mortgage may be extended or refinanced; however the
total reverse mortgage loan amount may 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.
9. The principal, including any accrued but unpaid interest, of a
reverse mortgage loan agreement entered into pursuant to this section
must 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
refinance or extend the reverse mortgage loan at the end of the term,
subject to such rules and 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 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.

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