Bill > H1332

This bill establishes new regulations for shared appreciation mortgages (SAMs), which are financial agreements where a lender receives a percentage of a property's value appreciation in exchange for more favorable loan terms. The bill requires that before entering into a SAM, borrowers must receive mandatory third-party counseling from a HUD-certified housing counseling agency, with the counseling costs paid by the lending entity. The bill limits the appreciation share an entity can claim to no more than 15% of the property's increased value, calculated either by the difference between original and current appraisals (minus improvement costs) or 15% of the property's initial value. Lenders must provide borrowers with a detailed written notice explaining the SAM terms, including payment deferral conditions, appreciation percentage, and the requirement for housing counseling. Borrowers must receive this notice at least 7 days before signing, and signing the notice does not obligate them to proceed with the mortgage. The bill also stipulates that the lending entity will be liable for any violations of federal and state laws, and the Attorney General is authorized to create implementing regulations and modify the disclosure notice as needed. The primary goal is to protect homeowners by ensuring transparency, providing counseling, and capping potential financial exposure in shared appreciation mortgage transactions.

Business and Industry

https://malegislature.gov/Bills/194/H1332