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H 1145

An Act regulating certain mortgages

194th Legislature (2025-2026) Introduced by James Arena-DeRosa and 6 co-sponsors

Bill H 1145 regulates shared appreciation mortgages in Massachusetts, ensuring fair practices, borrower protections, and clear terms for homeowners and lenders.

Hearing rescheduled to 11/18/2025 from 10:30 AM-01:00 PM in A-2 and Virtual Hearing updated to New End Time
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Bill Summary · H 1145

Summary of Bill H 1145: An Act Regulating Certain Mortgages

Purpose and Intent

Bill H 1145 aims to regulate shared appreciation mortgage loans in the Commonwealth of Massachusetts. The legislation seeks to provide a framework for these types of mortgages, ensuring that both borrowers and lenders understand their rights and obligations. The intent is to promote fair lending practices while allowing homeowners to benefit from potential appreciation in property value.

Key Provisions

The bill introduces several important provisions regarding shared appreciation mortgages, which are defined as loans that allow lenders to share in the appreciation of the property value under certain conditions. Key provisions include:

Definitions

  • Shared Appreciation Mortgage: A mortgage that includes an agreement for the lender to share in the appreciation of the property value upon specific events (e.g., sale, transfer of ownership).
  • Shared Appreciation Payment: The amount the borrower must pay to the lender based on the appreciation of the property.

Loan Terms

  • The shared appreciation payment cannot exceed 15% of the appreciation value or 15% of the property's value at the time the mortgage is originated.
  • No penalties for early repayment or termination of the mortgage.
  • Borrowers retain their rights and remedies under the law.
  • The mortgage must allow for refinancing without restrictions.
  • Provisions must be included to ensure that heirs can continue payments after the borrower's death.

Counseling and Disclosure Requirements

  • Borrowers must receive counseling from a HUD-certified housing counselor at least 14 days before finalizing the mortgage.
  • Lenders must provide written disclosures at least 21 business days prior to consummation, detailing loan terms and counseling information.

Foreclosure-Related Services

  • If the mortgage involves foreclosure rescue, the Annual Percentage Rate (APR) must not exceed the Average Prime Offer Rate.
  • Limits on the sale price for properties involved in foreclosure transactions.

Loan Servicing

  • Lenders must provide periodic statements to borrowers, similar to those required under the Truth in Lending Act.

Affected Parties

This bill primarily affects:
- Homeowners: Individuals seeking shared appreciation mortgages for properties designed for up to four families.
- Lenders: Financial institutions and entities that originate or service these types of mortgages.
- Housing Counselors: Professionals providing required counseling services to borrowers.

Procedural Aspects

  • Introduced: February 27, 2025
  • Current Status: The hearing for the bill has been rescheduled to November 18, 2025, from 10:30 AM to 1:00 PM in room A-2, with a virtual hearing option available.
  • Legislative Actions: The bill has been referred to the Financial Services Committee and has received concurrence from the Senate.

Conclusion

Bill H 1145 is a significant legislative effort to regulate shared appreciation mortgages in Massachusetts, aiming to protect borrowers while providing lenders with a structured framework for these loans. The bill's provisions are designed to enhance transparency, ensure fair practices, and facilitate informed decision-making for homeowners.

Compiled from official sources — confirm details with the bill’s official record.

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