1. For purposes of this section the following terms shall have the following meanings:

1. (a) Reverse mortgage loans. A loan which is secured by a first mortgage on real property improved by a one- to four-family residence or condominium that is the residence of the mortgagor(s) the proceeds of which are advanced to the mortgagor(s) during the term of the loan in equal installments, in advances through a line of credit or otherwise, in lump sums, or through a combination thereof.
2. (b) Term reverse mortgage loan. Any reverse mortgage loan that has a fixed term to maturity.
3. (c) Tenure reverse mortgage loan. Any reverse mortgage loan that does not have a fixed term to maturity, but rather matures solely upon contingent events, such as events including but not limited to death or the real property securing the loan no longer being the mortgagors' principal residence.
4. (d) Authorized lender. Any bank, trust company, national banking association, savings bank, savings and loan association, federal savings bank, federal savings and loan association, credit union, or federal credit union or any licensed mortgage banker approved for the making of reverse mortgage loans by the superintendent of financial services or any entity exempted from licensing pursuant to section five hundred ninety of the banking law and approved for the making of reverse mortgage loans by the superintendent of financial services.
5. (e) Mortgagor. A tenant in severalty who is sixty years of age or older, or if the real property is held by tenants by the entirety or by joint tenancy, the youngest of which is sixty years of age or older.
6. (f) Superintendent of financial services. The superintendent established pursuant to section two hundred two of the financial services law.

2. A reverse mortgage loan pursuant to this section shall be subject to the following:

1. (a) the loan to value ratio shall be determined by the superintendent of financial services; and
2. (b) subject to such rules or regulations as the superintendent of financial services shall adopt, any authorized lender or any successor or assign of such authorized lender which suspends, ceases or makes late payments to a mortgagor under a reverse mortgage loan shall be subject to forfeiture (as liquidated damages to such mortgagor and not as a penalty) of twice the interest which would otherwise have been earned during the period in which payments were suspended, ceased or made late, provided that said authorized lender or any successor or assign of such authorized lender shall have the right to make payments pursuant to said loan agreement within fifteen days of each payment date, without penalty; and
3. (c) the outstanding balance may be prepaid in full by the mortgagor without penalty at any time during the term and/or tenure of the loan; and
4. (d) an authorized lender is prohibited from using or attaching any property or asset of the mortgagor except the real property securing the reverse mortgage loan in settlement of a reverse mortgage obligation; and

5. (e) the authorized lender must deliver to an applicant such disclosures as may be required by the superintendent of financial services which shall describe the relevant portions of the reverse mortgage being offered, and shall include but not be limited to the following items:

   1. (i) except for a tenure reverse mortgage loan, a schedule of payments to and from the mortgagor and the total payments in dollars over the term of the reverse mortgage loan for both the mortgagor and mortgagee depending on the type of reverse mortgage loan being offered;
   2. (ii) a statement prominently displayed advising applicants to consult with appropriate authorities regarding tax and estate planning consequences of a reverse mortgage;
   3. (iii) where applicable a description of prepayment and refinancing features;
   4. (iv) the interest rate and, except for a tenure reverse mortgage loan, the total interest payable on the loan;
   5. (v) a statement concerning the compliance of the lender with the criteria established by the superintendent of financial services that an authorized lender must meet before it may make reverse mortgage loans pursuant to this section; and
   6. (vi) a statement setting forth those events which would terminate the reverse mortgage loan; and
6. (f) in the event that an authorized lender or holder of the reverse mortgage loan intends to initiate foreclosure proceedings the mortgagor shall have the right to designate a third party who shall be notified. In the event that the mortgagor has not designated a third party to receive such notice of foreclosure, then the authorized lender or the holder of said reverse mortgage loan shall notify the local or county office for the aging of its intent to commence foreclosure proceedings. Such entity shall take appropriate action to protect the interests of the mortgagor; and
7. (g) an authorized lender must deliver to the applicant, upon application, if available, a statement prepared by the local or county office for the aging on the advisability and availability of independent counseling and information services. Further, no reverse mortgage commitment shall be issued by an authorized lender until the applicant presents, in writing, a statement that the terms of the reverse mortgage loan have been explained by an attorney, a housing and urban development certified counselor or any other counseling service as indicated on the statement supplied by the county or local office for the aging or a signed affidavit indicating that the applicant, although made aware of the importance of counseling and its local availability through the provision of such information by the authorized lender, chooses not to utilize any of the aforementioned available services. The form of such statement and affidavit shall be developed by the New York state office for the aging; and
8. (h) any such reverse mortgage shall expressly and conspicuously bear a legend identifying it as such; and
9. (i) subject to such rules or regulations as the superintendent of financial services may adopt, a reverse mortgage loan shall be made at either a fixed or variable rate of interest.

3. A reverse mortgage loan pursuant to this section may:

1. (a) provide that the mortgagor's closing costs, including but not limited to loan or commitment fees, if any, insurance premiums, house repairs, legal fees, the cost of annuities, the costs of third-party counseling, the costs of existing mortgages or liens, and other appropriate costs be included in the principal of the reverse mortgage loan and disbursed out of the loan proceeds at closing;
2. (b) provide for the maintenance of an escrow account by the authorized lender for purposes of payment of real property taxes, insurance on the property securing the loan, or any other fees and expenses as may be permitted by superintendent of financial services regulation;
3. (c) provide that an authorized lender may, consistent with federal laws and regulations, include a due-on-sale clause in its reverse mortgage loan agreement and at its option exercise and enforce such clause in accordance with its terms.