If at first you don’t succeed, try, try again. So goes the maxim of perseverance, a trait that describes the now successful and multi-year efforts of legislators to grant shareholders of the housing cooperative the same access to reverse mortgages as other homeowners. On Wednesday, December 1, Governor Kathy Hochul signed a law (S760 / A1508), sponsored by Bronx MP Jeffrey Dinowitz (AD 81) and State Senator Alessandra Biaggi (SD 34) that represents parts of the Bronx and Westchester County, into law. The bill has received strong support from cooperative housing advocates in New York City and now allows cooperative housing shareholders to obtain reverse mortgages on cooperative apartment loans.
Reverse mortgages are a common financial tool used by senior homeowners whose assets are often tied up in their homes. They allow homeowners to access certain loans which can be used to pay for the expenses of daily living. This is done by allowing homeowners to borrow money against the value of their home without requiring ongoing and immediate loan repayments. Instead, the reverse mortgage is paid off when the borrower dies or sells their home. Before the signing of this new law, cooperative apartment homeowners, who may have needed money to pay for some living expenses, were forced to sell their home and move out as they were not eligible to apply for such reverse mortgages.
Reacting to the passage of the bill, Dinowitz said, “A lot of apartment buildings in New York City are co-op apartments. These apartments provide affordable homeownership opportunities for New Yorkers who may not be able or willing to purchase private homes or condos, and it is critical that we do not maintain a bifurcated system where different types of homeowners have different access to the equity in their homes. “
The assembly member said he was proud the legislation was finally enacted and added that he was grateful to the many organizations that have helped support and shape the policy on behalf of older co-operators. “Thanks to Governor Hochul for reviewing this legislation with fresh eyes, and I look forward to a future New York where people are not forced to leave their homes just because they need the extra cash,” he said. declared Dinowitz.
Meanwhile, Biaggi said: “As elected officials, we must do all we can to protect our elderly owners – especially in the midst of a pandemic. This law will give seniors and residents of low- and middle-income co-ops the same resources and protections as traditional owners, ensuring that they will never be forced to sell their homes and leave their communities if they need loans. additional.
The senator added, “These protections will protect the elderly communities and allow the elderly in New York, who desperately want to stay in their homes, the opportunity to do so.” I am grateful to Assembly Member Dinowitz for his continued advocacy on this issue, and to Governor Hochul for enacting this legislation and protecting our elderly homeowners.
The new legislation was originally introduced by Dinowitz in 2018 and was nearly enacted in 2019, after a significant number of consumer protections were added to strengthen and prevent the scams that often plague homeowners looking for reverse mortgages. These protections include the establishment of certain rules and regulations by the State Department of Financial Services that lenders must adhere to. They prohibit unfair or deceptive practices by lenders in marketing or offering reverse mortgages to co-operators.
They require the inclusion of additional consumer protection documents, as deemed appropriate by the Department of Financial Services. They also require lenders to provide borrowers with monthly account statements on existing lines of credit. Other rules cover the requirement for new procedural steps that must be taken when a lender determines that a loan is in default and requires the lender to proactively contact the borrower and others.
The 2018 bill was ultimately vetoed by former Gov. Andrew Cuomo who, it was recently reported, is now expected to return some of the revenue he made from the book he wrote about his handling of the pandemic, following a 12-1 vote by the Joint Commission on Public Ethics. The decision would be appealed.
Cuomo’s veto on the reverse mortgage bill was despite backing from AARP, an interest group that focuses on issues affecting people over fifty and co-op-oriented organizations. . He also enjoyed wide support among lawmakers (134-10 in the Assembly and 62-0 in the State Senate). The veto note cited federal regulations prohibiting apartment co-operators from participating because reverse mortgages would not be secured by “real estate.” Co-operatives are not considered real property, unlike private houses. Another reason given was the risk of foreclosure that borrowers may be exposed to from unscrupulous lenders.
Not to be discouraged, lawmakers and lawyers banded together and recently passed the legislation yet again, this time by a 148-1 margin in the Assembly, and by a 62-1 margin in the Senate of the United States. ‘State. This time, with the new governor’s administration in place, in the form of Hochul, and renewed efforts to ensure that the focus is on the lengthy consumer protections included in the bill, it was finally enacted. It will enter into force 180 days after its signature by the governor, which means that it will come into force on May 30, 2022. The bill will be subject to some small changes that will clarify and strengthen the wording of the bill, and which were accepted by the governor and both chambers.
The news was welcomed by Beth Finkel, director of AARP in New York State, who said, “The house you own is your house, whatever its shape, and AARP New York is delighted that co-op owners can now access well-regulated reverse mortgages so they don’t lose their homes to meet their financial obligations. She added: “AARP New York congratulates Governor Hochul for enacting this bill, and Member of the Assembly Dinowitz and Senator Biaggi for ensuring that it contains strong consumer protections. – as well as their perseverance and determination to carry it out.
Meanwhile, Stephen Budihas, President of the Association of Riverdale Cooperatives & Condominiums (ARC), said: “We at the Association of Riverdale Cooperatives & Condominiums, representing over 140 buildings that offer nearly 19,000 units of housing in the North Bronx, [are] delighted to hear that Assembly Member Dinowitz and his colleagues have worked successfully to bring the revised and improved reverse mortgage bill to the governor’s desk. “
He said he looked forward to the day when shareholders of properly qualified co-ops could take advantage of what he said was a way to provide the financial support they might need, just as their neighbors in private housing have long. could do it. “I have no doubts that the boards of directors of co-ops will adopt the new provision and quickly review applications with the same diligence they have long applied to initial and second mortgages,” he said. “A big thank you to our elected officials in Albany for having recognized and adopted this initiative for which the ARC has advocated for so long. “
The Fordham Hill Owners Cooperation, based at One Fordham Hill Oval in Fordham Manor, is touted as the largest privately funded co-op apartment complex in New York City. A rally was recently held at the complex and a petition is currently circulating as more than 100 shareholders oppose yet another proposal to increase maintenance fees which is expected to take effect in early 2022. Norwood News contacted the co-op’s board of directors for comment. Their legal representatives said they did not have any.
Meanwhile, Mary Ann Rothman, executive director of the Council of New York Cooperatives & Condominiums, spoke about the new bill. “When Governor Hochul signed the Reverse Mortgage Law, it gave hundreds of seniors hope to live their lives in the housing co-ops that have long been their homes.”