If at first you don’t succeed, try, try again. So goes the maxim for perseverance, a trait which describes the now successful, multi-year efforts of legislators to grant cooperative housing shareholders the same access to reverse mortgages as other homeowners. On, Wednesday, Dec 1,  Gov. Kathy Hochul signed legislation (S760/A1508), sponsored by Bronx Assemblyman Jeffrey Dinowitz (A.D. 81) and State Sen. Alessandra Biaggi (S.D. 34) who represents parts of the Bronx and Westchester county, into law. The bill was strongly supported by advocates for cooperative housing in New York and now allows cooperative housing shareholders to obtain reverse mortgages on cooperative apartment loans.

Reverse mortgages are financial tools, frequently used by older homeowners whose assets are often tied up in their homes. They allow the homeowners to access certain loans which can be used to pay for daily living expenses. This is done by allowing the homeowners to borrow money against the value of their homes without requiring ongoing and immediate loan repayments. Instead, the reverse mortgage is repaid when the borrower dies or sells their home. Prior to the signing of this new law, cooperative apartment owners, who may have needed cash to pay for certain living expenses, were forced to sell their homes and relocate, because they were ineligible to apply for such reverse mortgages.

Reacting to the bill’s passage, Dinowitz said, “Many residential buildings in New York are cooperative apartments. These apartments offer affordable home ownership opportunities to New Yorkers that may not be able or desire to purchase private homes or condos, and it is critical that we do not maintain a bifurcated system where different types of homeowners have different access to the equity contained within their homes.”

The assemblyman said he was proud that the legislation has finally been signed into law, and added that he was grateful to the many organizations who helped support and shape the policy on behalf of older cooperators. “Thank you to Gov. Hochul for looking at this legislation with a fresh pair of eyes, and I look forward to a future New York where people are not compelled to leave their homes simply because they need some extra cash flow,” Dinowitz said.

Meanwhile, Biaggi said,”As elected officials, we must do everything we can to protect our elderly homeowners –– especially in the midst of a pandemic. This legislation will grant elderly and low to middle-income co-op residents the same resources and protections as traditional homeowners, ensuring that they are not ever forced to sell their homes and leave their communities if in need of additional loans.”

The senator added, “These protections will safeguard elderly communities, and allow New York’s seniors, who so desperately wish to stay in their homes, the ability to do so. I am grateful to Assembly Member Dinowitz for his continued advocacy on this issue, and to Gov. Hochul for signing this legislation into law, and protecting our senior homeowners.”

The new legislation was originally introduced by Dinowitz in 2018, and was nearly enacted in 2019, after a significant number of consumer protections were added to strengthen and prevent against scams that often plague homeowners seeking reverse mortgages. These protections include the establishment of certain rules and regulations by the State Department of Financial Services to which lenders must adhere. They prohibit unfair or deceptive practices by lenders when marketing or offering reverse mortgage loans to cooperators.

They mandate the inclusion of supplemental consumer protection materials, as deemed appropriate by the Department of Financial Services. They also mandate lenders to provide borrowers with monthly account statements on prevailing lines of credit. Other rules cover the requirement of new procedural steps that must be taken when a lender determines that a loan is in default and requires the lender to proactively contact the borrower and others.

The 2018 bill was ultimately vetoed by former Gov. Andrew Cuomo who, it has recently been reported, must now reportedly return some of the proceeds he made from the book he wrote on his management of the pandemic, following a 12-1 vote by the Joint Commission on Public Ethics. The decision is reportedly being appealed.

Cuomo’s veto of the reverse mortgage bill was despite support for it by the AARP, an interest group which focuses on issues affecting those over the age of fifty, and co-op-oriented organizations. It also had widespread support among legislators (134-10 in the Assembly and 62-0 in the State Senate). The veto memo cited federal regulations precluding cooperative apartment shareholders from participation because reverse mortgages would not be secured by “real property.” Co-ops are not considered to be real property, whereas private homes are. Another reason cited was the foreclosure risk to which borrowers may be exposed from unscrupulous lenders.

Not to be discouraged, legislators and advocates regrouped and recently passed the legislation once more, this time by a margin of 148-1 in the Assembly, and by a margin of 62-1 in the State Senate. This time, with the new gubernatorial administration in place, in the form of Hochul, and renewed efforts to ensure focus on the lengthy consumer protections included in the bill, it was ultimately signed into law. It will go into effect 180 days after it was signed by the governor, meaning it will become effective on May 30, 2022. The bill will be subject to some small changes that will clarify and strengthen the bill’s language, and which were agreed to by the governor and both houses.

The news was welcomed by Beth Finkel, director at AARP in New York State, who said, “The home you own is your home no matter what form it takes, and AARP New York is thrilled that co-op owners will now be able to access properly-regulated reverse mortgages so they don’t lose their homes to meet their financial obligations.” She added, “AARP New York applauds Gov. Hochul for signing this bill into law, and Assemblyman Dinowitz and Sen. Biaggi for ensuring it contained strong consumer protections – and their perseverance and determination in seeing it through to enactment.”

Meanwhile, Stephen Budihas, president of the Association of Riverdale Cooperatives & Condominiums (ARC) said, “We, at the Association of Riverdale Cooperatives & Condominiums, representing more than 140 buildings that offer nearly 19,000 units of housing throughout the north Bronx, [are] thrilled to hear that Assemblyman Dinowitz and his colleagues have worked successfully to bring the revised and improved Reverse Mortgage bill to the Governor’s desk.”

He said he looked forward to the day when duly qualified co-op shareholders could take advantage of what he said was a means of providing needed financial support they may determine and require, just as their neighbors in private housing have long been able to do. “I am confident that coop boards will embrace the new provision and expeditiously review applications with the same diligence as they have long applied to original and second mortgages,” he said. “Many thanks are due to our elected officials in Albany for recognizing and embracing this initiative for which ARC has so long advocated.”

Fordham Hill Owners Cooperation, based at One Fordham Hill Oval in Fordham Manor, is advertised as the largest privately financed co-operative apartment complex in the City of New York. A rally was recently organized at the complex and a petition is currently circulating because over 100 shareholders oppose another proposed maintenance fee hike that is due to go into effect in early 2022. Norwood News reached out to the Co-op board for comment. Their legal representatives said they had none.

Meanwhile, Mary Ann Rothman, executive director of the Council of New York Cooperatives & Condominiums, said of the new bill. “When Governor Hochul signed the reverse mortgage legislation, it provided hundreds of seniors the hope of living out their lives in the housing cooperatives that have long been their homes.”

Cover photo: A community resident chats with Assemblyman Jeff Dinowitz at the town hall meeting.
Photo courtesy Office of Assemblyman Jeff Dinowitz