Mass. AG Rule Protects Homeowners from Predatory Shared Appreciation Mortgages - NCLC
By Google News Personal Finance ·
Stronger Rules Needed to Ensure Homeowners Aren’t Issued Loans that Cost Them Their Homes
BOSTON – The Massachusetts Attorney General has taken an important step to protect Massachusetts homeowners from risky home equity theft loans with a new rule to provide more transparency around so-called “shared appreciation mortgages (SAM).”
The new rule provides enhanced protections for homeowners, but given the extreme risks of these complex arrangements, advocates urge that more must be done to rein in other lenders with similar predatory mortgage loan products.
Set to take effect today, the AG’s rule stems from a law passed in November 2024 as a provision in the Economic Development bill (Section 269) that created a dangerous loophole for homeowners by granting a blanket waiver of liability under Massachusetts consumer protection laws for non-profit SAMs, including BlueHub, stripping away crucial consumer protections and leaving homeowners vulnerable to predatory lending practices. Without eliminating SAMs as an option, the Attorney General’s new rule ensures they are used responsibly and transparently.
The dangers and risks involved in SAMs has also been recognized by the Massachusetts courts in the class action Humes et al. v. BlueHub Capital, Inc., a case that exposed the hidden, subprime interest rates that plague these mortgage loans and accelerate home loss. The court found that BlueHub is liable for violating several Massachusetts lending laws and recently certified the class to proceed.
“While presented as a lifeline, shared appreciation mortgages often become a trap,” said Andrea Bopp Stark, senior attorney at the National Consumer Law Center. “The AG’s final rule protects people from BlueHub’s loan model and similar products, but Massachusetts must go further…
Originally published by Google News Personal Finance
