1. A. Financing Agreements and Commitments.

   1. (1) In addition to providing any other disclosures required by Commercial Law Article, Title 12, Subtitles 9 and 10, Annotated Code of Maryland, a lender receiving an application for a shared appreciation agreement shall, regardless of lien position, provide a borrower with a financing agreement.

   2. (2) The lender shall satisfy the requirement to provide a financing agreement for a mortgage loan made under a shared appreciation agreement in the following manner:

      1. (a) By providing the disclosure form found in Appendix A of this chapter, or a substantially similar form, within 10 business days after the date an application for a shared appreciation agreement is completed; and
      2. (b) By calculating the annualized cost based on the term in each scenario within the form in Appendix A of this chapter using the method prescribed in 12 CFR Part 1026 Appendix J for calculating an annual percentage rate.
   3. (3) If the terms of the disclosure provided by the lender under §A(2) of this regulation are subject to change, a lender offering a shared appreciation agreement, regardless of lien position, shall provide a borrower with a commitment.

   4. (4) The lender shall satisfy the requirement to provide a commitment for a mortgage loan made under a shared appreciation agreement in the following manner:

      1. (a) By providing the disclosure form found in Appendix A of this chapter, or a substantially similar form, with a statement that the terms therein are not subject to change, at least 72 hours before the settlement time agreed to by both parties; and
      2. (b) By calculating the annualized cost based on the term in each scenario within the form in Appendix A of this chapter using the method prescribed in 12 CFR Part 1026 Appendix J for calculating an annual percentage rate.

2. B. Compliance with Disclosures in Appendix A of this Chapter.

   1. (1) A form will be considered substantially similar to the one in Appendix A of this chapter if it includes all information provided in Appendix A of this chapter.

   2. (2) A lender shall disclose the following information regarding the estimated fair market value of the property:

      1. (a) The method used to calculate the estimated fair market value;
      2. (b) The amount, if any, by which the lender is discounting the estimated fair market value in establishing the property’s initial value;
      3. (c) The estimated fair market value of the property and any discount applied to that value in determining the starting value; and
      4. (d) The potential impact of that discount on their repayment amount.
3. C. Compliance with Applicable Law. Compliance with this regulation shall constitute compliance with any requirements under Commercial Law Article, §12-922 or 12-1022, Annotated Code of Maryland, to provide a financing agreement or a commitment.

Authority: Financial Institutions Article, §§2-105.1, 12-926, and 12-1030, Annotated Code of Maryland

Effective date: November 25, 2024 (51:23 Md. R. 1036)