N.Y. Comp. Codes R. & Regs. tit. 3 § 79.11

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

Section 79.11 - Prohibited conduct and administrative penalties

(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.

N.Y. Comp. Codes R. & Regs. Tit. 3 § 79.11

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