Banking Interpretations

NYSBL  6-h
General Regulations Part 79

February 28, 2008


Re: Disclosures Reverse Mortgages

Dear [---]:

Your electronic mail, dated December 14, 2007, to the New York State Banking Department has been referred to me for response. In your letter you asked for confirmation as to what, if any, disclosures are necessary to be made by mortgage bankers and/or mortgage brokers involved in making reverse mortgage loans.
As a preliminary matter, you are correct in noting that 3 NYCRR General Regulations of Banking Board ("GRBB"), Part 79.1(a), provides that "section 6-h of the Banking Law, sections 280 and 280-a of the Real Property Law and [Part 79] is the exclusive authority for lenders ... to make or participate in reverse mortgage loans," and that Part 38, which primarily relates to disclosures, among other Parts of the GRBB, does not apply to the "origination of or participation in reverse mortgage loans."

Therefore, in confluence with the above-stated exclusivity and inapplicability provisions of Part 79.1(a), neither a mortgage banker nor a mortgage broker involved in the process of making a reverse mortgage loan, is required to comply with the disclosure requirements of Part 38. However, note that a mortgage banker (as a lender) is required to make certain disclosures under Part 79, and, therefore, in the event a mortgage broker is also involved in a reverse mortgage transaction, such mortgage banker is required to ascertain that the necessary disclosures are made either by itself or by the mortgage broker.

I trust the foregoing is responsive to your inquiry.

Very truly yours,

Harry C. Goberdhan
Assistant Counsel