3 CRR-NY 79.7NY-CRR
3 CRR-NY 79.7
3 CRR-NY 79.7
79.7 Termination of reverse mortgage loans.
(a) Reverse mortgage loans may be terminated by the mortgagee solely in the event of any of the following:
(1) the sale, conveyance, transfer or assignment of any part of the real property securing the loan or any of the mortgagor’s rights in the real property, whether voluntarily or involuntarily;
(2) the mortgagor’ death, or if there is more than one mortgagor, then the death of the last living mortgagor. If an eligible surviving non-mortgagor spouse lives at the mortgage premises, such spouse may live in the property for the rest of his or her life as long as they cure any default in payment of property charges and remain there as their primary residence;
(3) the mortgagor, without notifying the mortgagee of an anticipated date of return and making arrangements satisfactory to mortgagee for the maintenance of the real property, ceases, in any 365-day period, to use the real property as his or her principal place of residence or in excess of 180 nonconsecutive days. This provision is subject to the following:
(i) the mortgagee’s consent to the arrangements made pursuant to this paragraph shall not be unreasonably withheld;
(ii) a mortgagor staying in a rehabilitative facility or nursing home is not subject to the notice requirements of this subsection;
(iii) a mortgagor staying in a rehabilitative facility or nursing home will not trigger termination for failure to use the real property as his or her principal place of residence until such failure persists for 12 consecutive months.
(4) the mortgagor’s real estate taxes or insurance premiums, as required pursuant to the security agreement, are in arrears;
(5) the mortgagor:
(i) is the subject of an involuntary petition in bankruptcy that is not discharged within 90 calendar days after it is filed; or
(ii) applies for or permits the appointment of a receiver, trustee or custodian for the real property securing the loan which is not discharged within 90 calendar days after the date of appointment; provided, however, that the appointment of a conservator, guardian, committee or other fiduciary of the person to act on the mortgagor' behalf in connection with a determination by a court that the mortgagor is incompetent will not terminate the loan; or
(6) the mortgagor fails to maintain the real property in accordance with section 79.6 of this Part.
(b) The mortgagor, his or her authorized designee or estate shall notify the mortgagee, in writing, immediately upon learning of the occurrence of any event listed in subdivision (a) of this section.
(c) Within 30 business days of learning of the occurrence of any event listed in subdivision (a) of this section, the mortgagee shall notify the mortgagor and their authorized designee, in writing, of such occurrence, along with information on the right to cure. The mortgagee must then allow the mortgagor 45 calendar days to cure. A mortgagee may only terminate a reverse mortgage loan if the mortgagor fails to cure any termination event within such 45-calendar day period.
(d) All lenders must prepare a form entitled “Lender's Limited Waiver of the Right of Foreclosure.” This document shall, clearly and conspicuously, identify every event, as provided for in this section that would give the mortgagee authority to terminate the loan, and shall be provided to and signed by the mortgagor at the closing of every loan. The lender shall furnish a copy of the executed form to every mortgagor at closing and shall keep the original form on file for the life of the loan, and thereafter in accordance with applicable statutes.
(e) A mortgagor may designate no more than two persons or entities to whom the mortgagee shall send copies of all notices that this section requires the mortgagee to send to the mortgagor. It shall be the obligation of the mortgagor and any authorized designee to provide the mortgagee with current mailing information for any person designated to receive such additional notice.
(f) In the event that a mortgagee seeks to foreclose on a reverse mortgage loan solely on the basis of any event listed in paragraphs (a)(3) or (4) of this section, the mortgagee shall make efforts to verify the mortgagor’ principal place of residence and, if, during the verification process, no responses are received in response to mailings relating thereto, such mortgagee shall cause a telephone call to be made to the mortgagor, or, if the mortgagor is unreachable by telephone, either an authorized designee(s) or, in the event that the mortgagor has no authorized designee, then the local or county office for the aging and an in person visit to be made to the mortgagor at the mortgaged real property. During such visit, the mortgagee or its agent shall provide clear information as to who they are, that the visit pertains to the reverse mortgage loan, the reason for the home visit, and the telephone number to call for further information. The mortgagee must wait at least 30-days following such visit, in addition to any additional time or notice requirements specified by any other provision of law, before initiating a foreclosure action on the basis of any event listed in paragraphs (a)(3) and (4) of this section. If any mortgagor contacts the mortgagee and provides proof of compliance with the relevant residency requirements after such visit but before the commencement of a foreclosure action, the mortgagee shall be barred from initiating such foreclosure action unless and until such time as a new event, as outlined in subdivision (a) of this section, occurs.
3 CRR-NY 79.7
Current through January 31, 2023
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