A new bill introduced in the New York Senate would allow lenders to receive no more than twenty percent of the future appreciation of the property securing the reverse mortgage as full or partial consideration for making the loan.
“Such future appreciation shall be limited by such rules and regulations as the banking board may adopt or the authorized lender may charge a fixed rate of interest on the outstanding balance of monies advanced under the reverse mortgage agreement or any combination thereof,” said the bill. “Any such appreciation shall not be considered interest for the purposes of any law regulating the maximum rate of interest which may be charged, taken or received.”
Shared appreciation reverse mortgage products haven’t been offered in quite some time, and the HECM program doesn’t offer the feature, so it’s odd the lawmakers are proposing such a bill.
The bill has been referred to the Finance Committee.
