Homebuyers and seniors with reverse mortgages can get help from two separate settlements with mortgage lenders, the state’s top law enforcement official announced.
Ohio-based KeyBank has agreed to pay $5 million to the State of New York Mortgage Agency, or SONYMA, to help fund down payment and closing costs for New Yorkers with low and moderate incomes, and it also will make $145 million in mortgage loans to people with low and moderate incomes over the next five years, under the terms of the state's settlement with the bank over its lending practices, Attorney General Letitia James said last week in a statement.
The attorney general’s office said the accord "resolves an investigation into the bank’s deceptive advertising practices surrounding the ‘KeyBank Plus’ program that was intended to help New Yorkers cash checks for low fees, but was not as readily available as KeyBank’s advertising claimed."
The program is being set up by SONYMA and details about eligibility will be released as soon as they are available, a spokeswoman for the attorney general said.
A KeyBank spokesman said in a statement, "We understand homeownership is a critical factor in building healthy neighborhoods and seek to improve the lives of residents in the neighborhoods we serve."
In an unrelated agreement, Champion, the reverse mortgage servicing division of Nationstar Mortgage LLC, agreed to pay $500,000 to resolve allegations that it failed to provide homeowners with "clear, accurate information" about the terms of its reverse mortgage loans. Reverse mortgages are loans that are only available to seniors. Borrowers are not required to make monthly payments to the lender, but they still must pay property taxes and insurance bills, which "puts homeowners at risk of default and foreclosure if they cannot afford those payments or if those obligations were not adequately explained," the attorney general’s office said in a statement.
The attorney general’s office said its investigation showed Champion "provided misleading information to borrowers, or failed to provide clear, accurate, and non-misleading information needed to assist homeowners who are at risk of losing their homes."
A spokeswoman for the lender said in a statement, "Champion is committed to providing a customer-centric experience and has taken steps to ensure we provide efficient and accurate information to our customers."
Champion will pay the funds to the attorney general’s Equitable Reverse Mortgage Assistance program, launched last year to offer low-cost loans to help seniors with reverse mortgages stay in their homes.
For more information, go to nwsdy.li/RELIEF or call 855-HOME-456.