A bill that would allow seniors aged 70 or older living in New York state to take out a reverse mortgage loan on a co-operative living space has been delivered to Gov. Kathy Hochul nearly six months after its initial passage in both state legislative chambers. This is according to the latest information available regarding the bill made available by the New York State Assembly and the New York State Senate.
The newest version of the bill — which serves as the culmination of a years-long effort by members of the reverse mortgage industry and New York state lawmakers — was authored after a similar bill that would allow reverse mortgages on co-ops failed to overcome a veto by then-Gov. Andrew Cuomo. The latest version of the bill was passed less than 60 days before Cuomo resigned from office following allegations of sexual misconduct, and appeared to be in legislative limbo precisely because of the turnover in the governor’s office.
The bill was passed in the State Assembly in mid-June, by which point Gov. Cuomo saw intensifying amounts of sexual misconduct allegations. New York Attorney General Letitia James launched an official investigation which published a report in August, and that concluded Cuomo had allegedly sexually harassed 11 women during his time in office. A week after the report was published, Cuomo announced that he would resign from office effective on August 24, at which point Hochul — who had been serving as lieutenant governor — would assume the governor’s office.
After a bill has been officially delivered to the governor’s office, the governor typically has 10 days from receipt – not including Sundays – to either sign the bill into law, or veto it and send it back to the state legislature. However, since the New York legislature is technically out of session at the moment, the governor has 30 days including Sundays in which she can make a decision. Failure to act at all – in a move known as a “pocket veto” – acts as if she actively chose to veto the bill, and send it back to the legislature.
In April, the reverse mortgage industry had indicated that it would prepare to make another attempt at getting reverse mortgages on co-ops approved in New York in a presentation made by the association’s outside counsel during the NRMLA Virtual Policy Conference in April.
While new movement on the topic appeared encouraging at that time, the likelihood of full passage and codification by then-Gov. Cuomo was not guaranteed, owing to the similarities between the new version of the bill and a previously-passed version which Cuomo vetoed at the end of 2019.
The bill requires the New York Department of Financial Services (NYDFS) to issue regulations related to the new type of loan, which could mean that even though the bill has been passed, more requirements for these types of loans could be required.
However, the bill was ultimately passed in June, with the State Assembly passing a revised version of the bill with a vote of 148-1, while the State Senate passed its version of the bill sponsored by State Sen. Alessandra Biaggi (D) with a vote of 62-1.
RMD will update readers on any additional movement on the legislation by the governor or the legislature when such information becomes available.