New York Codes, Rules and Regulations
Title 3 - BANKING
Chapter I - GENERAL REGULATIONS OF THE SUPERINTENDENT
Part 79 - Reverse Mortgage Loans
Section 79.11 - Prohibited conduct and administrative penalties
Universal Citation: 3 NY Comp Codes Rules and Regs ยง 79.11
Current through Register Vol. 46, No. 12, March 20, 2024
(a) A mortgagee or broker, as applicable, may not:
(1) make a R PL 280, R PL 280 -a or R PL
280 -b loan in the State of New York without having a reverse mortgage program
that has been approved by the superintendent;
(2) make a reverse mortgage loan to a
mortgagor who has not been provided with the counseling acknowledgment prior to
counseling or has not completed the counseling acknowledgment prior to
commitment in accordance with sections
79.5(e)
and
79.9(a)(4)
of this Part;
(3) make any false
promise to influence, persuade or induce a consumer to sign a reverse mortgage
loan application or documents;
(4)
pressure or coerce a consumer to sign a reverse mortgage loan application or
reverse mortgage loan documents by misrepresenting or omitting material
information about the terms of the reverse mortgage loan;
(5) discourage a consumer in a reverse
mortgage loan transaction from seeking or obtaining independent legal counsel
or legal advice or discouraging inclusion of family members from counseling
sessions or from otherwise participating in the process;
(6) fail to make any disclosure to a consumer
required by and at the time specified by any applicable state or federal law,
regulation or directive;
(7) accept
telephone applications;
(8) request
or accept a confession of judgment; or
(9) steer, direct, recommend, or otherwise
encourage a consumer to seek the services of any particular housing counselor,
or encourage a consumer not to seek the services of any particular housing
counselor.
(10) make any false or
misleading statement or classification of a reverse mortgage product being
offered including, but not limited to any statement that the product offered:
(a) is a government benefit or is not a
loan;
(b) has been endorsed by
Federal Housing Administration or Housing and Urban Development; and
(c) contains any features or limitations that
are inconsistent with state or federal rules and requirements;
(11) make any false or misleading
statement or classification of any advertisement, including, but not limited
to, use of the words "public service announcement;"
(12) make any false or misleading statement
about default or foreclosure including, but not limited to, any statement that
a mortgagor can "never lose" their home or there is "no risk" to a mortgagor's
home;
(13) make any false or
misleading statement about "fixed" rates and payments including, but not
limited to, using the word "fixed" in an advertisement for an adjustable rate
reverse mortgage loan;
(14) make
any false or misleading statement about monthly payments or the overall cost of
the product including, but not limited, to any statement that a:
(a) mortgagor will "never make monthly
payments" or not be required to repay a reverse mortgage loan "during your
lifetime;"
(b) mortgagor will
"never owe more than the value of your home;" and
(c) reverse mortgage loans provide payments
"for life;"
(15) create
a false sense of urgency by providing any misleading or inaccurate information
about limits on the availability of a reverse mortgage product or any feature
thereof;
(16) make any false or
misleading use of the name of the consumer's current financial institution,
including but not limited to, using such name in an advertisement that is not
sent by or on behalf of the consumer's current financial institution;
(17) provide any information about material
terms or required disclosures partially in a foreign language, while providing
information about other material terms or required disclosures only in English;
and
(18) make any false or
misleading statement about government entitlements, sponsorships or insurance
including, but not limited to, statements which may give a reverse mortgage
applicant the impression that their financial interests are government insured
or otherwise protected.
(b) A violation of this Part shall constitute grounds for the revocation or termination of a reverse mortgage program approval issued to a lender.
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