Connecticut House Bill HB05141

Connecticut 2024 Regular Session

• Introduced: 2/15/24
• Refer: 2/15/24

Caption

An Act Concerning Shared Appreciation Agreement Disclosures.

Impact

The proposed legislation impacts state laws concerning mortgage practices by formalizing disclosure norms for shared appreciation agreements. This measure is set to take effect on October 1, 2024, providing borrowers with crucial insights into financial transactions that previously lacked clear guidelines. Through this legislation, the state aims to mitigate risk for consumers in a housing market where shared appreciation agreements could lead to significant financial liability if not understood fully by borrowers.

Summary

House Bill 5141 aims to enhance transparency in shared appreciation agreements by imposing specific disclosure requirements on mortgage lenders. The bill mandates that lenders provide prospective borrowers with clear written information detailing the terms of such agreements. This includes essential data regarding the lender's potential share in appreciation, repayment conditions, and the tax implications of entering into such an agreement. The stated aim is to ensure that borrowers fully understand their financial responsibilities and the risks involved before committing to a shared appreciation loan.

Contention

Debate surrounding HB 5141 may center on the effectiveness of the proposed disclosures versus the potential burden it places on mortgage lenders. Proponents argue that enhanced disclosures will protect consumers and increase trust in financial institutions, while critics may voice concerns regarding the administrative burden these requirements impose on lenders. Additionally, there could be discussions about the adequacy of the information provided and whether it sufficiently equips borrowers to make informed decisions about entering shared appreciation agreements.