What is the issue?
The federal government does not consider cooperative apartments to be real property and therefore will not back reverse mortgages loans or issue guidelines for this type of housing. Recently legislation that would allow reverse mortgages for seniors 70 and over who make their homes in cooperatives has passed the New York State Senate and has been introduced in the Assembly. If passed, this bill (# A.10246) would open the door for lenders not interested in FHA to begin to make reverse mortgage loans in NY State. However, the legislation, as currently written, does not have strong protections for the owners who are elderly and can easily be taken advantage of. Even some of the bill's sponsors don't want it to leave committee until stronger protections are included.
Why is this issue important to our members?
Many co-op owners in Park Slope and elsewhere are "house rich and cash poor". The equity in their homes has skyrocketed, and it would be good if they could utilize it.
What is GNPS doing about this issue?
Luckily, one of our members, Tally Talbot, has experience as a financial counselor working with reverse mortgage contracts. She will be reviewing the legislation and examples of current reverse mortgage contracts to help us pinpoint provisions that should be included in the legislation that would make sure coop owners have more protections. For example, the federal legislation has a provision that before a contract can be signed the owner needs to meet with an impartial financial counselor to review the contract to help them understand what they are about to sign. We would like this provision to be included in the state legislation as well.
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