SECTIONS 1917.330-1917.334 - California Statutes

CIVIL CODE

SECTION 1917.330-1917.334

1917.330. Lenders may make shared appreciation loans for seniors
pursuant to this chapter for the refinancing of real property
improved with one- to four-dwelling units, including structures
ancillary to such dwelling units and including attached single-family
dwelling units, single-family mobilehome units, residential
condominium units, and dwelling units within a planned unit
development. Shared appreciation loans shall be made to refinance
only owner-occupied dwelling units, but in the case of two- to
four-unit dwellings financed under this chapter, only one of the
units need be owner-occupied. A dwelling unit shall be conclusively
deemed to be owner-occupied for purposes of this chapter with respect
to initial qualification for participation in the loan program if a
borrower certifies in writing to the lender at the time the loan is
made that he or she will occupy the property.
Nothing contained herein shall be deemed or interpreted to
restrict a lender from providing a shared appreciation loan based
solely upon the value of the real property upon which the borrower's
dwelling is situated, secured only by that real property and not by
the improvements thereon. In that case, the lender's actual
contingent interest, and any other necessary calculations, shall be
based upon the land value alone, not taking into account any
improvements thereon. This paragraph is declaratory of existing law.

1917.331. (a) A shared appreciation loan for seniors shall include
all of the following:
(1) The term of the loan shall be for an open-ended term,
terminating upon the occurrence of a maturity event, or the failure
of the borrower to meet the terms of a deed of trust granted by the
borrower to the lender which are normally and customarily used by
mortgage lenders in this state for loans secured by residential real
property. However, if the maturity event is either cessation of
occupancy of the property by the borrower or death of the borrower,
the term shall be extended until the earlier of the sale or
refinancing of the property or 12 months after the occurrence of the
maturity event.
(2) An initial advance, if desired by the borrower.
(3) Monthly annuity payments which shall continue until the
occurrence of a maturity event, or earlier termination in accordance
with paragraph (1).
(4) Interest on (2) and (3), calculated no more often than monthly
at the stated interest rate.
(5) Actual contingent interest.
(6) Interest on paragraphs (2) to (5), inclusive, compounded no
more often than monthly, from the date of a maturity event until the
loan is repaid in full.
(b) The loan shall be secured by a deed of trust on the real
property financed.
(c) The aggregate amount of any fee charged to the borrower by the
lender for processing an application, preparing any necessary
documents, obtaining a credit report, or any other costs incurred by
the lender in connection with originating a shared appreciation loan
for seniors shall not exceed five hundred dollars ($500). No prepaid
interest shall be charged to the borrower.

1917.332. Any provision in any loan made pursuant to this chapter
for the discontinuation or termination of a monthly annuity other
than upon the occurrence of a maturity event is void and
unenforceable.

1917.333. (a) The borrower shall have the right to prepay, at any
time, in full or in part, the total loan obligation.

1917.334. Except as provided in this article, the terms and
conditions of the shared appreciation loan for seniors shall be
subject to all laws applicable to loans in effect on the date the
loan is made.