Ethics for Real Estate Attorneys

Tonight, 12.11.19, I am teaching the CLE Course Ethics for Real Estate Attorneys as sponsored by my good friends at First American.

The supporting materials for the course can be found here.

New Law: Reverse Mortgages Regulated

On December 6, 2019, A5626 was signed into law to regulate reverse mortgages. The new law takes effect on March 5, 2020. 

A reverse mortgage means "[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."

The new law has the following features at new Real Property Law section 280-b:

1. Marketing & offering of reverse mortgage loans are regulated to avoid unfair or deceptive practices;
2. Consumer protection materials are required to be included in marketing such loans & the Superintendent is authorized to promulgate rules & regulations to protect consumers;
3. Loans that pay taxes, mortgage insurance, homeowners insurance, or other property obligations must provide the borrower with periodic account statements & a required warning notice;
4. When the escrowed money for payments of obligations are depleted to 10% or less, the borrower will get a telephone & mailed notice about the borrowers obligations; 
5. Restricts lenders from paying borrowers obligations on the property (taxes, mortgage insurance, homeowners insurance, etc.) as advance payments & only permits lenders to pay when there are arrears;
6. Restricts foreclosures based on primary residence restrictions; 
7. Requires both the lender & the borrower to be represented by an attorney at the closing of the loan; 
8. Borrowers who are injured from a violation by a lender have a private right of action for treble damages & reasonable attorneys' fees; & 
9. Violating this statute by a lender works a complete defense for a borrower in a foreclosure action.

DOS Notice to Licensees in Real Estate Brokerage

Licensees just received this notice on Fair Housing. Remember - discriminating in real estate can result in fines, license revocation, and huge judgment awards in lawsuits.

Lieb School is committed to ending discrimination in housing by educating licensees about behaviors that constitute inadvertent discrimination. Lieb School - Where the Law is Followed.


Dear Licensee:

Please see attached Fair Housing Guidance Document. This email is a reminder notification of your obligation as a Real Estate Licensee to adhere to the laws prohibiting discriminatory practices.

If you have any questions pertaining to this topic, please contact us at eAccessNY@dos.ny.gov.

Division of Licensing Services
NYS Department of State