Legislature passes invoice to permit senior coop homeowners to use for reverse mortgage loans – Bronx Occasions
Rep. Jeffrey Dinowitz helps pass a bill that will allow senior co-op owners to apply for reverse mortgage loans
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Legislators passed a bill last week that would allow seniors living in cooperative apartment buildings to apply for a reverse mortgage, a type of loan available to homeowners that converts the home equity they build into cash.
Sponsored by Rep. Jeffrey Dinowitz and Senator Alessandra Biaggi, sponsored by the National Association of Housing Cooperatives and the Council of New York Cooperatives and Condominiums, the bill comes amid nearly two decades of unsuccessful lobbying efforts with the U.S. Department of Housing and urban development to provide senior citizens in cooperative housing with access to this type of loan
Many people who live in cooperative housing units are older, have low to middle incomes, and have a steady income that comes solely from social security and pension checks. Although cooperative housing is not considered “real estate” and has traditionally not been eligible for reverse mortgage lending, cooperative owners have invested a significant portion of their lifetime income in this home equity. Often times, these seniors face financial demands that they cannot afford due to their recurring sources of income and are forced to sell their homes for access to cash.
However, the law previously passed in 2019 was rejected by Governor Andrew Cuomo on the grounds that “borrowers would still be exposed to unnecessary risk that could lead to foreclosure”. This despite numerous statutory consumer protection provisions, such as B. Restrictions on how lawyers can describe their reverse mortgage offering, requirements, information on credit counseling and other helpful decision-making materials, foreclosure and / or sales process guidelines and their impact on the reverse mortgage, and more.
“Cooperative housing is a very common way for New Yorkers to achieve home ownership goals, and seniors who live in these cooperatives deserve access to the same resources as traditional homeowners so they aren’t forced to sell their homes to to get access to cash, ”said Dinowitz. “Our goal should be to help seniors age on the spot, in the homes they have often lived in for decades, and this legislation does just that. I hope Governor Cuomo reveals his rejection of this policy and ask him to sign it as soon as it has arrived at his desk. “