You are here: / / FORECLOSURE OF A REVERSE MORTGAGE CAN BE BASED UPON HOMEOWNER’S FAILURE...

FORECLOSURE OF A REVERSE MORTGAGE CAN BE BASED UPON HOMEOWNER’S FAILURE TO MAKE HAZARD INSURANCE PAYMENTS.

The Third Department determined summary judgment should not have been granted to defendant homeowner in a reverse-mortgage foreclosure action. Foreclosure proceedings were started because defendant did not make hazard insurance payments. Plaintiff bank made those payments on her behalf. The Third Department held that the relevant regulations allowed plaintiff bank to make the hazard insurance payments, but did not require it to do so. Foreclosure, therefore, can be based upon defendant’s failure to make the payments:

 

Defendant was obliged to “pay all property charges consisting of taxes, ground rents, flood and hazard insurance premiums, and special assessments” under the terms of the loan documents (24 CFR 206.205 [a]), and those documents contemplate that foreclosure is an available remedy for her failure to perform such an obligation (see 24 CFR 206.27 [b] [6]; [c] [2] [iii])[FN1]. Supreme Court nevertheless held that plaintiff was precluded from seeking foreclosure by 24 CFR 206.205 (c), which provides that “[i]f the mortgagor fails to pay the property charges in a timely manner, and has not elected to have the mortgagee make the payments, the mortgagee may make the payment for the mortgagor and charge the mortgagor’s account” (emphasis added). Language such as “may” should ordinarily be read as permissive, “and mandatory effect is given to [it] only when required by the context of the [regulation], the facts surrounding its [promulgation], or the purposes sought to be served thereby” (McKinney’s Cons Laws of NY, Book 1, Statutes § 177 [b]). The context of 24 CFR 206.205 gives no reason to believe that mandatory effect should be afforded to its discretionary language and, contrary to the conclusion of Supreme Court, neither does the purpose underlying the federal regulatory scheme. The scheme in question is intended to enable the Secretary to provide insurance for reverse mortgages that will facilitate the offering of such mortgages to elderly homeowners by lenders which, in turn, will allow the homeowners to monetize their accumulated home equity (see 12 USC § 1715z-20 [a]; 24 CFR 206.1). This actual goal runs against an interpretation of the regulation that would prevent a mortgagee from pursuing whatever permissible remedy it deems appropriate to recover unpaid carrying costs and, indeed, adopting that reading could well have a chilling effect on the willingness of lenders to offer reverse mortgages. We therefore read 24 CFR 206.205 (c) as allowing, but not requiring, plaintiff to pay carrying charges owed by defendant rather than resorting to foreclosure … . Onewest Bank, FSB v Smith, 2016 NY Slip Op 00092, 3rd Dept 1-7-16

 

FORECLOSURE (FORECLOSURE OF REVERSE MORTGAGE MAY BE BASED ON HOMEOWNER’S FAILURE TO MAKE HAZARD INSURANCE PAYMENTS)/MORTGAGES (FORECLOSURE OF REVERSE MORTGAGE MAY BE BASED ON HOMEOWNER’S FAILURE TO MAKE HAZARD INSURANCE PAYMENTS)/REVERSE MORTGAGES (FORECLOSURE OF REVERSE MORTGAGE MAY BE BASED ON HOMEOWNER’S FAILURE TO MAKE HAZARD INSURANCE PAYMENTS)/REVERSE MORTGAGES (FORECLOSURE OF REVERSE MORTGAGE MAY BE BASED ON HOMEOWNER’S FAILURE TO MAKE HAZARD INSURANCE PAYMENTS)

You might also like
DISQUALIFICATION OF ATTORNEY APPROPRIATE TO AVOID THE APPEARANCE OF IMPROPRIETY.
THE CARRIER’S APPLICATION FOR APPEAL SHOULD NOT HAVE BEEN DISMISSED FOR FAILURE TO INCLUDE THE DATE WHEN THE OBJECTION WHICH IS THE BASIS OF THE APPEAL WAS MADE; THERE WAS ONLY ONE HEARING AND THE REGULATION IN EFFECT AT THE TIME ONLY ASKED “WHEN” THE OBJECTION WAS MADE (THIRD DEPT).
CLAIMANT WAS ENTITLED TO MORE COMPENSATION FOR THE 3.86 ACRES TAKEN FOR AN AIRPORT RUNWAY AND THE 80.72 ACRES TAKEN FOR AN AVIGATION (RUNWAY APPROACH) EASEMENT; PURSUANT TO THE ISSUES OF CONTIGUITY, UNITY OF USE AND UNITY OF TITLE. THE ENTIRE PARCEL, NOT A SINGLE SMALLER PARCEL, WAS AFFECTED BY THE TAKING (THIRD DEPT).
BEFORE PETITIONER INMATE’S ARTICLE 78 PETITION WAS CONSIDERED RESPONDENT VOLUNTARILY REVERSED THE GUILTY FINDINGS ON THE PRISON DISCIPLINARY VIOLATIONS; PETITIONER WAS NOT ENTITLED TO ATTORNEY’S FEES PURSUANT TO THE EQUAL ACCESS TO JUSTICE ACT UNDER THE “CATALYST THEORY” (THIRD DEPT).
Criteria for Termination of Parental Rights on the Ground of Mental Illness Explained
DEFENSE COUNSEL’S TAKING A POSITION ADVERSE TO DEFENDANT’S PRO SE MOTION TO WITHDRAW HIS GUILTY PLEA VIOLATED DEFENDANT’S RIGHT TO EFFECTIVE ASSISTANCE OF COUNSEL (THIRD DEPT).
SIDEWALK DEFECT TOO TRIVIAL TO BE ACTIONABLE.
BRAND AMBASSADOR NOT AN EMPLOYEE.

Categories

Sign Up for the Mailing List to Be Notified When the Site Is Updated.

Copyright © 2023 New York Appellate Digest, LLC
Site by CurlyHost | Privacy Policy

DOCTRINE OF EQUITABLE ESTOPPEL DID NOT APPLY TO PETITIONER’S REQUEST FOR... PLAINTIFF COMPELLED TO SUBMIT TO EXAMINATION BY DEFENDANT’S VOCATIONAL...