N.Y. Comp. Codes R. & Regs. tit. 3 § 79.2

Current through Register Vol. 46, No. 45, November 2, 2024

Section 79.2 - Definitions

For purposes of this Part:

(a) The term advertisement means any information, whether disseminated through print or published material, electronic media, audio or visual material, or descriptive literature used to inform consumers about or induce consumers to apply for a reverse mortgage loan. The term advertisement shall not include:

(1) Direct personal contacts relating to the negotiation of a specific transaction;

(2) Informational material, such as, interest-rate and loan-term memos, distributed only to business entities;

(3) Notices required by federal or state law, if the law mandates that specific information be displayed and only the information so mandated is included in the notice;

(4) News articles the use of which is controlled by the news medium;

(5) Market-research or educational materials that do not solicit business; or

(6) Communications about an existing credit account, such as a promotion encouraging additional or different uses of an existing credit card account.

(b) The term application fee means any fee collected in connection with an application for a reverse mortgage loan including any charge for soliciting, processing, placing or negotiating a reverse mortgage loan. The term application fee does not include a commitment fee or a lock-in fee, nor does such term include payments to be remitted to third-party service providers.

(c) The term arrears means unpaid amounts due after expiration of the deadline, all grace periods and payment agreements.

(d) The term authorized designee means the third party designated by the mortgagor to receive notices in accordance with sections 280 (2)(f), 280-b (2)(m) and 280-b (6) of the Real Property Law.

(e) The term broker means a mortgage broker as defined in article 12-D of the Banking Law.

(f) The term business day means any day of the week except for Saturday, Sunday and any legal holiday.

(g) The term clear and conspicuous means that the statement, representation or term being disclosed is of such size, color, contrast, and/or audibility and is so presented as to be readily noticed and understood by the person to whom it is being disclosed. If such statement is necessary as a modification, explanation, or clarification to other information with which it is presented, it must be presented in close proximity to the information it modifies, in a manner so as to be readily noticed and understood.

(h) The term counseling statement means a written disclosure prepared either by the local or county office for the aging or in accordance with section 79.9(a)(1) of this Part, on the advisability and availability of independent counseling and information services.

(i) The term Eligible Surviving Non-Mortgagor Spouse means the spouse of a mortgagor, who is not also a mortgagor, and who:

(1) met, and continues to meet the requirements of the subject reverse mortgage loan both at the time of the loan closing and at the time of the mortgagor's death;

(2) was either:

(a) legally married - as determined by the law of the state in which the spouse and mortgagor reside(d) or the state of celebration - to the mortgagor at the time of loan closing and who remained married to the mortgagor until the mortgagor's death; or

(b) engaged in a committed relationship with the mortgagor akin to marriage but was prohibited, at the time of the loan origination, from legally marrying the mortgagor based on the gender of both the mortgagor and non-mortgagor spouse, but was legally married prior to the death of the mortgagor, as determined by the law of the state in which the spouse and mortgagor reside(d) or the state of celebration, to the mortgagor and remained married until the death of the mortgagor; and

(3) Currently resides and resided in the property secured by the reverse mortgage loan as his or her principal residence at origination of the reverse mortgage loan and throughout the duration of the life of the reverse mortgage loan.

(j) The term exempt organization means any insurance company, banking organization, foreign banking corporation licensed by the superintendent or the comptroller of the currency to transact business in this state, national bank, federal savings bank, federal savings and loan association, federal credit union, or any bank, trust company, savings bank, savings and loan association, or credit union organized under the laws of any other state, or any instrumentality created by the United States or any state with the power to make mortgage loans.

(k) The term housing counselor means a Housing and Urban Development counselor or any other counseling service as listed on a counseling statement supplied by the county or local office for the aging.

(l) The term lender means any person or entity engaged in the business of making reverse mortgage loans.

(m) The term mortgagee means a lender or lenders, an assignee or assignees thereof, or a servicer or servicers acting on behalf of a lender or assignee.

(n) The term mortgagor means each original borrower on the reverse mortgage loan and his or her heirs, executors, administrators and assignees.

(o) The term principal place of residence means living and sleeping quarters.

(p) The term property charges means charges related to the mortgaged property's property taxes, hazard insurance premiums, any applicable flood insurance premiums, ground rents, condominium fees, planned unit development fees, homeowners' association fees, water/utility bills and any other special assessments that may be levied by any municipality or pursuant to State law.

(q) The term reverse mortgage loan means an R PL 280 loan, R PL 280 -a loan or R PL 280 -b loan, which is secured by a first mortgage on real property, located in the state of New York, improved by a one- to four-family residence or condominium that is the residence of the mortgagor, the proceeds of which are advanced to the mortgagor during the life of the loan in equal installments, in advances through a line of credit or otherwise, in lump sums, or through a combination thereof.

(r) The term R PL 280 loan means a loan made under section 280 of the Real Property Law.

(s) The term R PL 280 -a loan means a loan made under section 280-a of the Real Property Law.

(t) The term R PL 280 -b loan or HUD/HECM loan means a loan made under the Demonstration Program of Insurance of Home Equity Conversion Mortgages for Elderly Homeowners reverse mortgage loan program, 12 USC section 1715z-20 and in accordance with section 280-b of the Real Property Law.

(u) The term servicer means a mortgage loan servicer as defined in Part 418 of this Title.

(v) The term set aside account means any account that a mortgagee establishes or controls to pay some or all property charges on behalf of a mortgagor with respect to a reverse mortgage loan, including charges that the parties have voluntarily agreed that the mortgagee should collect and pay, and includes any arrangement by which the mortgagee reserves a portion of the mortgagor's principal for subsequent payment of property charges or conditional repairs under a repair rider. The definition encompasses any account established for any of the above purposes, regardless of title given, including a "reserve account," "reserve fund," "repair set aside account" "life expectancy set aside account" or "escrow account." For purposes of this section, the term "set aside account" excludes any account that is under the mortgagor's total control such as a line of credit, as detailed in section 79.12(c) of this Part.

(w) The term termination shall mean acceleration of a reverse mortgage loan as a result of the borrower's mortgagor's default.

N.Y. Comp. Codes R. & Regs. Tit. 3 § 79.2

Adopted New York State Register July 29, 2020/Volume XLII, Issue 30, eff. 7/29/2020