1917.170. (a) The disclosures made pursuant to this chapter, as
required, shall be the only disclosures required to be made pursuant
to state law for shared appreciation loans, notwithstanding any
contrary provision applicable to loans not made under this chapter,
except those, if any, that may be required by reason of the
application of Division 1 (commencing with Section 25000) of the
Corporations Code, or Chapter 1 (commencing with Section 11000) of
Part 2 of Division 4 of the Business and Professions Code. However, a
lender shall not be precluded from supplementing the disclosures
required by this chapter with additional disclosures that are not
inconsistent with the disclosures required by this chapter.
(b) Whenever specific language is prescribed by this chapter,
substantially the same language shall be utilized if possible, but
reasonably equivalent language may be used to the extent necessary or
appropriate to achieve a clearer or more accurate disclosure.
1917.171. (a) Each lender offering shared appreciation loans shall
furnish to a prospective borrower, on the earlier of the dates on
which the lender first provides written information concerning shared
appreciation loans from the lender or provides a loan application
form to the prospective borrower, a written disclosure as provided in
this section.
(b) The disclosure shall be entitled "INFORMATION ABOUT THE (Name
of Lender) SHARED APPRECIATION LOAN," and shall describe the
operation and effect of the shared appreciation loan including a
brief summary of its terms and conditions, together with a statement
consisting of substantially the following language, to the extent
applicable to such loan:
INFORMATION ABOUT THE (Name of Lender) SHARED APPRECIATION
LOAN
(Name of Lender) is pleased to offer you the opportunity to
finance your home through a shared appreciation loan.
Because the shared appreciation loan differs from the usual
mortgage loan, the law requires that you have a detailed explanation
of the special features of the loan before you apply. Before you sign
your particular shared appreciation loan documents, you will receive
more information about your particular shared appreciation loan,
which you should read and understand before you sign the loan
documents.
The loan will bear a stated rate of interest which will be
(percent) below the prevailing market interest rate. In exchange for
a stated interest rate which is below the prevailing rate, you will
be obligated to pay us additional interest later. This additional
interest is called "contingent interest."
The loan will require a balloon payment at the end of the _____
year. Thus, if you do not sell the property before that time, you
will need to refinance the loan at that time.
Contingent Interest
This loan provides that you, as borrower, must pay to us, as
lender, as contingent interest, (percent) of the net appreciated
value of the real property which secures the loan. This contingent
interest is due and payable when the property is sold or transferred,
when the loan is paid in full, upon any acceleration of the loan
upon default, or at the end of the term of the loan, whichever first
occurs. The dollar amount of contingent interest, if any, which you
will be required to pay cannot be determined at this time. If the
property does not appreciate, you will owe us nothing. The contingent
interest will not become due if title to the property is transferred
on your death to a spouse, or where a transfer results from a decree
of dissolution of a marriage and a spouse becomes the sole owner.
Your obligation to pay contingent interest will reduce the amount
of the appreciation, if any, that you will realize on the property.
This appreciation will not produce a real gain in your equity in the
property, unless the appreciation rate exceeds the general inflation
rate, but you will be required to pay a portion of the appreciation
as contingent interest without regard to whether the appreciation has
resulted in a real gain.
When you sell or refinance your home, you normally will receive
enough cash to pay the shared appreciation loan balance, accrued
interest, prepayment charge (if applicable), contingent interest, and
expenses of sale. However, if you sell with only a small
downpayment, you may possibly not receive enough cash to pay the
contingent interest, and, in that event, it will be necessary for you
to provide cash from other funds.
Calculating the Contingent Interest
Contingent interest will be calculated as follows:
FAIR MARKET VALUE OF THE PROPERTY (Sale
price or appraised value.
- (less) BORROWER'S COST OF THE PROPERTY (This amount
includes certain costs paid by you incident to
the purchase.
- (less) VALUE OF CAPITAL IMPROVEMENTS MADE BY YOU
(Must exceed $2,500 in value. Must also exceed
$2,500 in cost unless you perform more than 50%
of the value of the labor or work on the
improvement.
_______________________________________________
= (equals) NET APPRECIATED VALUE
x (times) ______ PERCENT OWED TO LENDER
= (equals) TOTAL CONTINGENT INTEREST
Determining Fair Market Value
If you sell your property for cash before maturity of your shared
appreciation loan, the gross sale price will be the fair market value
of the property, unless appraisals are requested by us and the
appraisals average more than the gross sale price. However, at your
request, we also will tell you what we consider to be the fair market
value of the property. If you sell for cash for a gross sale price
that equals or exceeds that amount, the gross sale price will control
and appraisals will not be needed.
Fair market value is determined by appraisals in the event of
sales involving a consideration other than cash, prepayment of the
loan in full, or maturity of the loan.
When appraisals are required, fair market value is determined by
averaging two independent appraisals of the property. You may select
one of the two appraisers from a list approved by the Federal
National Mortgage Association. If appraisals are requested by us, we
will provide you with full information on how to select an appraiser.
In lieu of appraisals, we may establish fair market value at an
agreed amount if an agreement can be reached between you and us.
Determining Value of Capital Improvements
Capital improvements with a value exceeding $2,500 (but no
maintenance or repair costs) may be added to your cost of the
property for the purpose of determining the net appreciated value,
but only if the procedures set forth in the shared appreciation loan
documents are followed. It is important to note that capital
improvements completed and claimed in any 12-month period must add
more than $2,500 in value to the property and must generally also
cost more than $2,500. However, if you have performed at least half
the value of the labor or other work involved, then the cost of the
improvements will not be considered. The appraised value of the
improvements will be the increase in the value of the property
resulting from the improvements. You will receive no credit for minor
or major repairs or for improvements that are not appraised at more
than $2,500, but the lender will acquire a share of any resulting
appreciation in the value of the property.
Determining Net Appreciated Value
We are entitled to receive __ percent of the net appreciated value
of the property as contingent interest. As shown in the chart above,
net appreciated value equals (1) the fair market value of the
property at the time of the sale or appraisal, less (2) your cost of
the property, less (3) the value of any capital improvements for
which you are entitled to credit.
Balloon Payment of Principal
If you do not sell the property before the end of the term of this
loan, you will need to refinance this loan at that time. The term of
this loan is (duration) years. We
1917.170. (a) The disclosures made pursuant to this chapter, as
required, shall be the only disclosures required to be made pursuant
to state law for shared appreciation loans, notwithstanding any
contrary provision applicable to loans not made under this chapter,
except those, if any, that may be required by reason of the
application of Division 1 (commencing with Section 25000) of the
Corporations Code, or Chapter 1 (commencing with Section 11000) of
Part 2 of Division 4 of the Business and Professions Code. However, a
lender shall not be precluded from supplementing the disclosures
required by this chapter with additional disclosures that are not
inconsistent with the disclosures required by this chapter.
(b) Whenever specific language is prescribed by this chapter,
substantially the same language shall be utilized if possible, but
reasonably equivalent language may be used to the extent necessary or
appropriate to achieve a clearer or more accurate disclosure.
1917.171. (a) Each lender offering shared appreciation loans shall
furnish to a prospective borrower, on the earlier of the dates on
which the lender first provides written information concerning shared
appreciation loans from the lender or provides a loan application
form to the prospective borrower, a written disclosure as provided in
this section.
(b) The disclosure shall be entitled "INFORMATION ABOUT THE (Name
of Lender) SHARED APPRECIATION LOAN," and shall describe the
operation and effect of the shared appreciation loan including a
brief summary of its terms and conditions, together with a statement
consisting of substantially the following language, to the extent
applicable to such loan:
INFORMATION ABOUT THE (Name of Lender) SHARED APPRECIATION
LOAN
(Name of Lender) is pleased to offer you the opportunity to
finance your home through a shared appreciation loan.
Because the shared appreciation loan differs from the usual
mortgage loan, the law requires that you have a detailed explanation
of the special features of the loan before you apply. Before you sign
your particular shared appreciation loan documents, you will receive
more information about your particular shared appreciation loan,
which you should read and understand before you sign the loan
documents.
The loan will bear a stated rate of interest which will be
(percent) below the prevailing market interest rate. In exchange for
a stated interest rate which is below the prevailing rate, you will
be obligated to pay us additional interest later. This additional
interest is called "contingent interest."
The loan will require a balloon payment at the end of the _____
year. Thus, if you do not sell the property before that time, you
will need to refinance the loan at that time.
Contingent Interest
This loan provides that you, as borrower, must pay to us, as
lender, as contingent interest, (percent) of the net appreciated
value of the real property which secures the loan. This contingent
interest is due and payable when the property is sold or transferred,
when the loan is paid in full, upon any acceleration of the loan
upon default, or at the end of the term of the loan, whichever first
occurs. The dollar amount of contingent interest, if any, which you
will be required to pay cannot be determined at this time. If the
property does not appreciate, you will owe us nothing. The contingent
interest will not become due if title to the property is transferred
on your death to a spouse, or where a transfer results from a decree
of dissolution of a marriage and a spouse becomes the sole owner.
Your obligation to pay contingent interest will reduce the amount
of the appreciation, if any, that you will realize on the property.
This appreciation will not produce a real gain in your equity in the
property, unless the appreciation rate exceeds the general inflation
rate, but you will be required to pay a portion of the appreciation
as contingent interest without regard to whether the appreciation has
resulted in a real gain.
When you sell or refinance your home, you normally will receive
enough cash to pay the shared appreciation loan balance, accrued
interest, prepayment charge (if applicable), contingent interest, and
expenses of sale. However, if you sell with only a small
downpayment, you may possibly not receive enough cash to pay the
contingent interest, and, in that event, it will be necessary for you
to provide cash from other funds.
Calculating the Contingent Interest
Contingent interest will be calculated as follows:
FAIR MARKET VALUE OF THE PROPERTY (Sale
price or appraised value.
- (less) BORROWER'S COST OF THE PROPERTY (This amount
includes certain costs paid by you incident to
the purchase.
- (less) VALUE OF CAPITAL IMPROVEMENTS MADE BY YOU
(Must exceed $2,500 in value. Must also exceed
$2,500 in cost unless you perform more than 50%
of the value of the labor or work on the
improvement.
_______________________________________________
= (equals) NET APPRECIATED VALUE
x (times) ______ PERCENT OWED TO LENDER
= (equals) TOTAL CONTINGENT INTEREST
Determining Fair Market Value
If you sell your property for cash before maturity of your shared
appreciation loan, the gross sale price will be the fair market value
of the property, unless appraisals are requested by us and the
appraisals average more than the gross sale price. However, at your
request, we also will tell you what we consider to be the fair market
value of the property. If you sell for cash for a gross sale price
that equals or exceeds that amount, the gross sale price will control
and appraisals will not be needed.
Fair market value is determined by appraisals in the event of
sales involving a consideration other than cash, prepayment of the
loan in full, or maturity of the loan.
When appraisals are required, fair market value is determined by
averaging two independent appraisals of the property. You may select
one of the two appraisers from a list approved by the Federal
National Mortgage Association. If appraisals are requested by us, we
will provide you with full information on how to select an appraiser.
In lieu of appraisals, we may establish fair market value at an
agreed amount if an agreement can be reached between you and us.
Determining Value of Capital Improvements
Capital improvements with a value exceeding $2,500 (but no
maintenance or repair costs) may be added to your cost of the
property for the purpose of determining the net appreciated value,
but only if the procedures set forth in the shared appreciation loan
documents are followed. It is important to note that capital
improvements completed and claimed in any 12-month period must add
more than $2,500 in value to the property and must generally also
cost more than $2,500. However, if you have performed at least half
the value of the labor or other work involved, then the cost of the
improvements will not be considered. The appraised value of the
improvements will be the increase in the value of the property
resulting from the improvements. You will receive no credit for minor
or major repairs or for improvements that are not appraised at more
than $2,500, but the lender will acquire a share of any resulting
appreciation in the value of the property.
Determining Net Appreciated Value
We are entitled to receive __ percent of the net appreciated value
of the property as contingent interest. As shown in the chart above,
net appreciated value equals (1) the fair market value of the
property at the time of the sale or appraisal, less (2) your cost of
the property, less (3) the value of any capital improvements for
which you are entitled to credit.
Balloon Payment of Principal
If you do not sell the property before the end of the term of this
loan, you will need to refinance this loan at that time. The term of
this loan is (duration) years. We
1917.170. (a) The disclosures made pursuant to this chapter, as
required, shall be the only disclosures required to be made pursuant
to state law for shared appreciation loans, notwithstanding any
contrary provision applicable to loans not made under this chapter,
except those, if any, that may be required by reason of the
application of Division 1 (commencing with Section 25000) of the
Corporations Code, or Chapter 1 (commencing with Section 11000) of
Part 2 of Division 4 of the Business and Professions Code. However, a
lender shall not be precluded from supplementing the disclosures
required by this chapter with additional disclosures that are not
inconsistent with the disclosures required by this chapter.
(b) Whenever specific language is prescribed by this chapter,
substantially the same language shall be utilized if possible, but
reasonably equivalent language may be used to the extent necessary or
appropriate to achieve a clearer or more accurate disclosure.
1917.171. (a) Each lender offering shared appreciation loans shall
furnish to a prospective borrower, on the earlier of the dates on
which the lender first provides written information concerning shared
appreciation loans from the lender or provides a loan application
form to the prospective borrower, a written disclosure as provided in
this section.
(b) The disclosure shall be entitled "INFORMATION ABOUT THE (Name
of Lender) SHARED APPRECIATION LOAN," and shall describe the
operation and effect of the shared appreciation loan including a
brief summary of its terms and conditions, together with a statement
consisting of substantially the following language, to the extent
applicable to such loan:
INFORMATION ABOUT THE (Name of Lender) SHARED APPRECIATION
LOAN
(Name of Lender) is pleased to offer you the opportunity to
finance your home through a shared appreciation loan.
Because the shared appreciation loan differs from the usual
mortgage loan, the law requires that you have a detailed explanation
of the special features of the loan before you apply. Before you sign
your particular shared appreciation loan documents, you will receive
more information about your particular shared appreciation loan,
which you should read and understand before you sign the loan
documents.
The loan will bear a stated rate of interest which will be
(percent) below the prevailing market interest rate. In exchange for
a stated interest rate which is below the prevailing rate, you will
be obligated to pay us additional interest later. This additional
interest is called "contingent interest."
The loan will require a balloon payment at the end of the _____
year. Thus, if you do not sell the property before that time, you
will need to refinance the loan at that time.
Contingent Interest
This loan provides that you, as borrower, must pay to us, as
lender, as contingent interest, (percent) of the net appreciated
value of the real property which secures the loan. This contingent
interest is due and payable when the property is sold or transferred,
when the loan is paid in full, upon any acceleration of the loan
upon default, or at the end of the term of the loan, whichever first
occurs. The dollar amount of contingent interest, if any, which you
will be required to pay cannot be determined at this time. If the
property does not appreciate, you will owe us nothing. The contingent
interest will not become due if title to the property is transferred
on your death to a spouse, or where a transfer results from a decree
of dissolution of a marriage and a spouse becomes the sole owner.
Your obligation to pay contingent interest will reduce the amount
of the appreciation, if any, that you will realize on the property.
This appreciation will not produce a real gain in your equity in the
property, unless the appreciation rate exceeds the general inflation
rate, but you will be required to pay a portion of the appreciation
as contingent interest without regard to whether the appreciation has
resulted in a real gain.
When you sell or refinance your home, you normally will receive
enough cash to pay the shared appreciation loan balance, accrued
interest, prepayment charge (if applicable), contingent interest, and
expenses of sale. However, if you sell with only a small
downpayment, you may possibly not receive enough cash to pay the
contingent interest, and, in that event, it will be necessary for you
to provide cash from other funds.
Calculating the Contingent Interest
Contingent interest will be calculated as follows:
FAIR MARKET VALUE OF THE PROPERTY (Sale
price or appraised value.
- (less) BORROWER'S COST OF THE PROPERTY (This amount
includes certain costs paid by you incident to
the purchase.
- (less) VALUE OF CAPITAL IMPROVEMENTS MADE BY YOU
(Must exceed $2,500 in value. Must also exceed
$2,500 in cost unless you perform more than 50%
of the value of the labor or work on the
improvement.
_______________________________________________
= (equals) NET APPRECIATED VALUE
x (times) ______ PERCENT OWED TO LENDER
= (equals) TOTAL CONTINGENT INTEREST
Determining Fair Market Value
If you sell your property for cash before maturity of your shared
appreciation loan, the gross sale price will be the fair market value
of the property, unless appraisals are requested by us and the
appraisals average more than the gross sale price. However, at your
request, we also will tell you what we consider to be the fair market
value of the property. If you sell for cash for a gross sale price
that equals or exceeds that amount, the gross sale price will control
and appraisals will not be needed.
Fair market value is determined by appraisals in the event of
sales involving a consideration other than cash, prepayment of the
loan in full, or maturity of the loan.
When appraisals are required, fair market value is determined by
averaging two independent appraisals of the property. You may select
one of the two appraisers from a list approved by the Federal
National Mortgage Association. If appraisals are requested by us, we
will provide you with full information on how to select an appraiser.
In lieu of appraisals, we may establish fair market value at an
agreed amount if an agreement can be reached between you and us.
Determining Value of Capital Improvements
Capital improvements with a value exceeding $2,500 (but no
maintenance or repair costs) may be added to your cost of the
property for the purpose of determining the net appreciated value,
but only if the procedures set forth in the shared appreciation loan
documents are followed. It is important to note that capital
improvements completed and claimed in any 12-month period must add
more than $2,500 in value to the property and must generally also
cost more than $2,500. However, if you have performed at least half
the value of the labor or other work involved, then the cost of the
improvements will not be considered. The appraised value of the
improvements will be the increase in the value of the property
resulting from the improvements. You will receive no credit for minor
or major repairs or for improvements that are not appraised at more
than $2,500, but the lender will acquire a share of any resulting
appreciation in the value of the property.
Determining Net Appreciated Value
We are entitled to receive __ percent of the net appreciated value
of the property as contingent interest. As shown in the chart above,
net appreciated value equals (1) the fair market value of the
property at the time of the sale or appraisal, less (2) your cost of
the property, less (3) the value of any capital improvements for
which you are entitled to credit.
Balloon Payment of Principal
If you do not sell the property before the end of the term of this
loan, you will need to refinance this loan at that time. The term of
this loan is (duration) years. We
