New York Gov. Andrew Cuomo has announced new regulatory proposals for reverse mortgages in the state, according to a HousingWire report.
Cuomo’s office said deceptive practices by reverse mortgage companies have led some New York seniors to face foreclosure.
“Misled and misinformed by advertisements, seniors often choose reverse mortgages for an additional income without fully understanding that payments are still required for all taxes, insurance, and home maintenance,” Cuomo’s office said. “As a result of these deceptive practices, many senior citizens face foreclosure because of a missed tax or insurance payment.”
Under New York’s current laws, homeowners with a reverse mortgage aren’t granted all the protections given to forward mortgage borrowers, according to HousingWire. Cuomo’s office said the new legislative proposals would remedy that.
Cuomo’s office is proposing the following actions:
Close consumer protection loopholes: Cuomo wants the same protections provided to all homeowners, regardless of whether they have a forward or reverse mortgage
Review of lending regulations: Cuomo will direct the state’s Department of Financial Services to launch a review regulations on reverse mortgages — and if necessary, revise some regulations.
Cuomo’s office also announced the creation of an “Elder Abuse Certification Program,” according to HousingWire. The program will be available for all banks in New York State. He also proposed granting financial institutions more authority to protect seniors.
“Currently, banks are insufficiently using their power to place holds on, or prevent suspicious transactions involving elder financial abuse,” Cuomo’s office said. “The Governor proposes new legislation further empowering banks to place holds on potentially fraudulent transactions in order to protect their consumers, and be immunized for doing so in good faith.”
Once banks identify fraud, they’ll be required to report it to the relevant state agencies, according to HousingWire.
“Exploitation of seniors is a particularly heartless and heinous crime and this administration is committed to doing everything in its power to stop this abuse and ensure these New Yorkers receive the protections they deserve,” Cuomo said. “These proposals will help seniors keep their finances and assets from being vulnerable to thieves and unscrupulous practices, and stop those who seek to exploit them right in their tracks.”
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