California Civil Code

§ 1917.712

CIV § 1917.712Div. 3 · Title 4 · Part 4 · Ch. 7 · Art. 6

Statute text

(a)Each lender making a shared appreciation loan for seniors shall also furnish to the prospective borrower, prior to the consummation of the loan, the disclosures required by Subpart C of Federal Reserve Board Regulation Z (12 C.F.R. Part 226), including 12 C.F.R. Section 226.18(f), to the extent applicable to the transaction.

(b)The disclosure made pursuant to subdivision (a) and Regulation Z shall be based on the fixed interest rate of the shared appreciation loan for seniors, and shall include a description of the shared appreciation feature, including (1) the conditions for its imposition, the time at which it would be collected, and the limitations on the lender’s share, as required by the Federal Reserve Board in the information published by the board in 46 Federal Register 20877-78 (April 7, 1981), and (2) the lender’s share of the appreciated value and the prevailing interest rate as defined in Section 1917.320.

(c)The disclosure made pursuant to subdivision (a) and Regulation Z shall be accompanied by (1) several transaction-specific examples of the operation and effect of the shared appreciation loan and (2) the following charts comparing the shared appreciation loan and a conventional loan made at the prevailing interest rate, and illustrating the possible increase in the monthly payments, and the possible annual percentage rate of finance charge, on the assumptions therein stated: Chart 1 CONVENTIONAL MORTGAGE AT ____% If the same loan balance were financed under a conventional, 30-year, fixed-rate, level-payment mortgage, your monthly payments would be: Years 1–30 $_______/mo. Chart 2 IF YOU REFINANCE THIS TRANSACTION AT ___% If your property appreciates at 10% per year, and if your loan obligation (including contingent interest due) at the end of __ years is refinanced at __% (the prevailing market interest rate now), your monthly payments will be: Years 1–__Refinancing loan $_______/mo.$_______/mo.* * Refinancing loan, assuming a conventional, 30-year, fixed-rate, level-payment mortgage. Other mortgage instruments, e.g., graduated-payment or shared-appreciation, if available, may result in lower payments. Chart 3 APR IF PROPERTY APPRECIATES AT 10% If your property appreciates at 10% per year, the total finance charge on your shared appreciation loan for seniors (including contingent interest) will equal $____, and the annual percentage rate of the total finance charge (including actual contingent interest) will equal ____%.

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Legislative history

Added by Stats. 1984, Ch. 1701, Sec. 1.