A bill that was passed in both houses of the New York State Assembly which would have authorized reverse mortgage cooperative apartment unit loans for the state’s senior population, while also providing additional consumer protections, was vetoed by the state’s governor shortly before the start of the holidays.
New York State Senate Bill S03686, which was drafted in February of 2019 and which passed both the Senate and State Assembly in June, was forwarded to Governor Andrew Cuomo’s office last month and was vetoed within a week of reaching his desk.
In a statement on his veto submitted to the New York State Senate and shared by the National Reverse Mortgage Lenders Association (NRMLA), Governor Cuomo said that the need to support New York’s population of seniors remains “crucial.” However, lingering concerns about some of the specifics of the bill in question ultimately convinced him to veto it.
“Most reverse mortgages are issued through the Home Equity Conversion Mortgage program, which is insured by the Federal Housing Administration of the Department of Housing and Urban Development (HUD),” Cuomo said in his statement. “HUD requirements for reverse mortgage eligibility precludes co-ops because the loan is not secured by a real property.”
The ability to draw upon home equity is still something that a contingent of seniors who live in co-ops would like to be able to do, Cuomo said. Still, consumer protections found in the bill do not appear sufficient enough for him to justify signing the bill into law.
“While I understand that some senior citizens who own shares of a building would like to be afforded the option to draw on their equity, I am concerned that despite the consumer protections designed to protect borrowers from unscrupulous practices contained in this bill, these borrowers will still be exposed to unnecessary risk that could lead to foreclosure,” Cuomo said.
The additional consumer protection language being insufficient for Governor Cuomo is something that NRMLA will aim to find out more about, according to Steve Irwin, the association’s president.
“We are working to determine why the governor felt that foreclosure risks were too great, despite all the consumer protection language we managed to get incorporated into the bill,” Irwin said.
The Council of New York Cooperatives & Condominiums (CNYC) also condemned the governor’s veto in a statement posted to the organization’s website.
“Governor Cuomo [disappointed] hundreds of seniors who supported this important legislation as they aged in place in New York housing cooperatives,” CNYC said in its statement. “Many of these seniors call CNYC on a regular basis for progress reports on the legislation that would have enabled them to live out their lives in the homes and communities dear to them. Now, many will be forced to sell their cooperatives for the funds to cover their living and medical expenses in their ‘golden years.’”