Conn. Gen. Stat. § 36a-498i: Mortgage lender licensees offering shared appreciation agreements. Required disclosures.

(a) As used in this section, “mortgage lender” and “shared appreciation agreement” have the same meanings as provided in section 36a-485.

(b) Any mortgage lender that is required to be licensed pursuant to sections 36a-485 to 36a-498e, inclusive, 36a-534a and 36a-534b and offers to make a shared appreciation agreement shall, not later than three business days after the prospective borrower under such proposed agreement submits an application to such mortgage lender for such proposed agreement, disclose to such prospective borrower, in writing:

(1) The following statement, which shall be clear, conspicuous and in at least twelve-point font: “You are not required to complete this agreement merely because you have received these disclosures or have signed a loan application. If you obtain this loan, the lender will have a mortgage and shared interest in your home. You could lose your home, and any money you have put into it, if you do not meet your obligations under the loan. You may wish to consult an attorney.”;

(2) Financial information relevant to the proposed shared appreciation agreement, including, but not limited to, whether such proposed agreement is terminated through repayment, which repayment may include the mortgage lender's receipt of some or all of the proceeds from a sale of the dwelling or residential real estate that is the subject of such proposed agreement if such proposed agreement is terminated by such sale;

(3) Agreement and transaction details for the proposed shared appreciation agreement, including, but not limited to, the mortgage lender's contact information, the transaction amount, the sum of cash to be paid to the prospective borrower, the starting value for appreciation sharing, the term of the proposed agreement and the estimated current fair market value of the dwelling or residential real estate that is the subject of such proposed agreement;

(4) The method of determining the current fair market value of the dwelling or residential real estate that is the subject of the proposed shared appreciation agreement;

(5) The method of determining the final value of the dwelling or residential real estate that is the subject of the proposed shared appreciation agreement upon termination of such proposed agreement;

(6) The interest charged, if applicable;

(7) The limit of the mortgage lender's share of appreciation or equity in the dwelling or residential real estate that is the subject of the proposed shared appreciation agreement;

(8) An advisory that the prospective borrower consult such borrower's tax advisor on the potential tax implications of the proposed shared appreciation agreement;

(9) Repayment examples for the proposed shared appreciation agreement based upon, at minimum:

(A) Settlement of such proposed agreement after five years, ten years, fifteen years and thirty years, in each case up to the maximum term of such proposed agreement; and

(B) (i) No change in the market value of the dwelling or residential real estate that is the subject of such proposed agreement, and (ii) changes in the market value of the dwelling or residential real estate that is the subject of such proposed agreement (I) at the rate of ten per cent total depreciation over the term of such proposed agreement, (II) at the rate of three and one-half per cent total appreciation over such term, (III) at the rate of five and one-half per cent total appreciation over such term, and (IV) reflecting the actual average rate of appreciation or depreciation for all dwellings or residential real estate in this state during the period that is equal to the term of such proposed agreement and that occurred immediately prior to such term; and

(10) The following information and corresponding calculations for the proposed shared appreciation agreement, if applicable:

(A) The calculated appreciation amount;

(B) The appreciation-based charge;

(C) The accrued or charged interest;

(D) The principal amount to be repaid;

(E) The mortgage lender's total calculated share of appreciation or equity;

(F) Any limit to the mortgage lender's share of appreciation or equity; and

(G) For each of the repayment scenarios specified in subdivision (9) of this section:

(i) The actual amount of money to be paid by the prospective borrower to the mortgage lender, inclusive of any unconditional administrative fees or reimbursement of protective advances that are required to be paid at the time of the settlement of such proposed agreement; and

(ii) The total cost to the prospective borrower expressed as an annual percentage rate, to allow the prospective borrower to compare, under each such repayment scenario, the cost at the time of the settlement of such proposed agreement with the cost of a traditional mortgage loan.