Local representative plans bipartisan legislation to protect homeowners
HARRISBURG – A local state legislator plans to introduce bipartisan legislation he and his cosponsors say will help protect homeowners.
Rep. Tim Twardzik (R-Schuylkill) is joining with State Reps. Arvind Venkat and Lindsay Powell D-Allegheny) to introduce legislation protecting consumers in Shared Appreciation Agreements, also known as Home Equity Sharing Agreements.
These contracts offer homeowners funds in exchange for granting a third party a future interest in the appreciation, equity, or value of their home.
“Homeowners deserve clear information and honest terms before signing any agreement that affects the future value of their home,” said Twardzik, co-chair of the bipartisan Pennsylvania Housing Caucus. “This legislation ensures families are not misled by complicated contracts and provides the attorney general with stronger tools to hold bad actors accountable.”
The legislation would add such agreements to the Loan Interest and Protection Law (Usury Law), extending to homeowners the same statutory safeguards that apply to other home-secured financial products. These protections include disclosure requirements, foreclosure safeguards, and remedies for violations.
Under a Shared Appreciation Agreement, the more a home appreciates, the more the homeowner must pay to satisfy the contract — often far exceeding the amount originally received. Conversely, if the home depreciates, the homeowner may still be required to repay a share of the reduced value to the investor.
“Homeowners may enter into a Shared Appreciation Agreement believing it is a beneficial decision for their family’s future,” said Venkat. “However, unfair or deceptive marketing practices can lead to significant financial hardship down the road. This legislation would provide stronger protections for homeowners as they consider whether to proceed with a Shared Appreciation Agreement.”
The three legislators are seeking additional co-sponsors and plan to introduce the bill later this month.
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