NY Bill Aims to Establish Low Income Reverse Mortgage Program for LTC Needs

A new bill to establish a reverse mortgage program for low income seniors to enable them to use the equity in their homes to provide for their long term care needs was introduced in the New York state Senate earlier this month.

According to the legislative findings, there are many senior citizens living in New York own their own homes and want to continue to live at home for as long as possible.  By unlocking the funds through a reverse mortgage, “house-rich and cash-poor” seniors can purchase the long-term care services they feel best meet their needs.

“Private funds from reverse mortgages also can strengthen community long-term care systems and reduce the burden on state and local Medicaid budgets,” said the findings.

Advertisement

According to the bill, any loan origination fees, closing costs or fees charged by the program would be at a reduced rate determined by the New York mortgage agency.  The loans would only be available to borrowers whose income does not exceed the maximum income limits established by the agency. In addition, the loans will not have a pre-payment penalty, not be issued for more than 80 percent of the value of the borrowers home, and the loan should include the cost of the care needed.

S639 was introduced by Senator Martin J. Golden at the end of December and was referred to the corporations, authorities and commissions on January 2.

Join the Conversation (23)

see all

This is a professional community. Please use discretion when posting a comment.

  • Admin,

    You say: ” The loans would only be available to borrowers whose income exceeds the maximum income limits established by the agency” but the proposal states the opposite: “LOW INCOME” SHALL MEAN INCOME THAT DOES NOT EXCEED THE INCOME LIMITS ESTABLISHED BY THE AGENCY.” Please excuse all of the capitals; it was a copy and paste job from the link you provided to the NY proposal. I make mistakes as well.

    It seems that the proposal does not permit the purchase of LTC insurance which is probably wise and prudent; otherwise, the bill would be potentially enriching LTC insurers at the expense of NY state. (I expect a pile of negative reaction for having written that).

    One day there needs to be a clear debate between those who support the use of proceeds to acquire LTC insurance and those who oppose it. That would be very interesting.

  • I feel like my head is going to explode!

    Hey Senator Golden….we already have a program to take care of the low-income seniors who are “house rich and cash poor”.

    It’s called a HECM!!!!!

  • Competition is as American as apple pie, and it is good for HECM. Other states will be watching New York. This is exciting! Good for seniors to have choice in reverse mortgages!!

    • Atare,

      I do not agree. No state has the financial backing to do this alone. Medicaid would be a worse disaster than it is if the states were in that game by themselves. None of the states have a “FHA” to serve as an insurer to make certain that its program is secure.

      We have heard these Medicaid arguments before but what they lack is a joint effort by state and federal governments. What state is equipped for this financial responsibility by itself?

      If there were 50 such programs nationally and just one failed, imagine the impact on all programs. Even the HECM program has not proven to be revenue neutral. Even now at a 1.25% ongoing MIP, new borrowers will be paying for the losses from earlier years. HUD can take the risk but can Rhode Island, California, Florida, Illinois, or even Minnesota?

    • Atare,

      I do not agree. No state has the financial backing to do this alone. Medicaid would be a worse disaster than it is if the states were in that game by themselves. None of the states have a “FHA” to serve as an insurer to make certain that its program is secure.

      We have heard these Medicaid arguments before but what they lack is a joint effort by state and federal governments. What state is equipped for this financial responsibility by itself?

      If there were 50 such programs nationally and just one failed, imagine the impact on all programs. Even the HECM program has not proven to be revenue neutral. Even now at a 1.25% ongoing MIP, new borrowers will be paying for the losses from earlier years. HUD can take the risk but can Rhode Island, California, Florida, Illinois, or even Minnesota?

  • Competition is as American as apple pie, and it is good for HECM. Other states will be watching New York. This is exciting! Good for seniors to have choice in reverse mortgages!!

  • This is exactly what our industry needs. The relationship between LTC as well as LTCi and reverse mortgage exists and as soon as both industries embrace it the quicker we can start helping more seniors.

    Critic my friend, watch that negativity…lol
    It’s perfectly OK for the insurance industry or the reverse mortgage industry to prosper if they are performing a service that is needed at a fair price.

    • Michael,

      To call something wise and prudent is being negative? Like Matt, I strongly believe this product could cost NY state billions. It could be far worse if LTCi was added to the permissible uses of funds.

    • Michael,

      To call something wise and prudent is being negative? Like Matt, I strongly believe this product could cost NY state billions. It could be far worse if LTCi was added to the permissible uses of funds.

  • This is exactly what our industry needs. The relationship between LTC as well as LTCi and reverse mortgage exists and as soon as both industries embrace it the quicker we can start helping more seniors.

    Critic my friend, watch that negativity…lol
    It’s perfectly OK for the insurance industry or the reverse mortgage industry to prosper if they are performing a service that is needed at a fair price.

  • What am I missing here? There are no restrictions on what a senior does with the proceeds of a HECM, so if they want to buy LTC insurance, they can. How is New York offering anything different than a HECM?

  • What am I missing here? There are no restrictions on what a senior does with the proceeds of a HECM, so if they want to buy LTC insurance, they can. How is New York offering anything different than a HECM?

  • ” not be issued for more than 80 percent of the value of the borrowers home “, Who is insuring these loans? The NYS taxpayer? When the proceeds run out and the loan is upside down and they go to Medicaid who is going to fund that?

    I am a life long resident of NY and the state is not doing a very good job running anything. Just look at our current budget deficit!

  • ” not be issued for more than 80 percent of the value of the borrowers home “, Who is insuring these loans? The NYS taxpayer? When the proceeds run out and the loan is upside down and they go to Medicaid who is going to fund that?

    I am a life long resident of NY and the state is not doing a very good job running anything. Just look at our current budget deficit!

  • You are telling me that you would be comfortable if your state began offering their own version of the HECM? Who would offer the mortgage insurance on the loans and at what factor? If you’re telling me that there wouldn’t be any mortgage insurance, I would be adamantly opposed as a citizen of said state. Isn’t this issue what keeps proprietary reverse mortgages from taking off?

  • You are telling me that you would be comfortable if your state began offering their own version of the HECM? Who would offer the mortgage insurance on the loans and at what factor? If you’re telling me that there wouldn’t be any mortgage insurance, I would be adamantly opposed as a citizen of said state. Isn’t this issue what keeps proprietary reverse mortgages from taking off?

  • there’s this amazing topping that I think would taste great on a hamburger or french fries, its made out of ground up tomatoes and other spices- you don’t really need to refrigerate it and it could be put into tiny little packets- I think that I am really smart and that people should use this whenever possible regardless if its ever been made or discussed before

  • there’s this amazing topping that I think would taste great on a hamburger or french fries, its made out of ground up tomatoes and other spices- you don’t really need to refrigerate it and it could be put into tiny little packets- I think that I am really smart and that people should use this whenever possible regardless if its ever been made or discussed before

  • Atare,

    You cannot be serious! Competition in the private sector is a good thing but not against government bureaucracies. You are obviously not a NYS taxpayer. Let them roll it out in your state and let me know how it works out!

    Senator Golden does champion the rights of seniors. I am sure his heart is in the right place but do you really think that a bill sponsored by someone whose business qualifications stem from going from the police dept. into politics qualifies him?

    Here is a paragraph from his Biography “Senator Marty Golden sponsors popular neighborhood events like senior citizen days, Halloween walks, Christmas tree lightings, Menorah lightings, Easter egg hunts, summer concerts in the park, summer movie nights, women’s history month, Senator for the day, Asian Lunar New Year, environmental clean ups, district office open house, school trips to Albany, mammograms, prostate screenings, and flu shots for senior citizens.” They forgot Moon Walks!

    This would be a nightmare for NY Taxpayers! Look at how they run Medicaid. It is riddled with fraud and mismanagement. There seems to be a new story in the papers every day. Do you really think in your wildest dreams that some state buracracy would actually be capable of implementing and policing such a program?

    So my question is ” What’s in that apple pie you’ve been eating?”

string(120) "https://reversemortgagedaily.com/2011/01/19/ny-bill-aims-to-establish-low-income-reverse-mortgage-program-for-ltc-needs/"

Share your opinion