An Act amending Title 7 (Banks and Banking) of the Pennsylvania Consolidated Statutes, providing for licensing and regulation of shared equity providers and shared equity agreements; imposing duties on the Department of Banking and Securities; and imposing penalties.

PRINTER'S NO. 1857
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No. 1402
Session of
2026
INTRODUCED BY PISCIOTTANO, SAVAL, FONTANA, HAYWOOD, COSTA,
COLLETT, SCHWANK, MALONE AND KEARNEY, JUNE 26, 2026
REFERRED TO BANKING AND INSURANCE, JUNE 26, 2026
AN ACT
Amending Title 7 (Banks and Banking) of the Pennsylvania
Consolidated Statutes, providing for licensing and regulation
of shared equity providers and shared equity agreements;
imposing duties on the Department of Banking and Securities;
and imposing penalties.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Title 7 of the Pennsylvania Consolidated Statutes
is amended by adding a chapter to read:
CHAPTER 63
SHARED EQUITY AGREEMENTS
Subchapter
A. Preliminary Provisions
B. Licensing and Administration
C. Shared Equity Agreements
D. Enforcement
E. Miscellaneous Provisions
SUBCHAPTER A
PRELIMINARY PROVISIONS
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Sec.
6301. Scope of chapter.
6302. Definitions.
§ 6301. Scope of chapter.
This chapter relates to the licensing and regulation of
shared equity providers and shared equity agreements.
§ 6302. Definitions.
The following words and phrases when used in this chapter
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Commission." The Banking and Securities Commission of the
Commonwealth.
"Control person." A member, director, principal officer,
office manager or controlling shareholder that owns, directly or
indirectly, 25% of a legal entity and any other person that has
authority to direct the management of the legal entity.
"Department." The Department of Banking and Securities of
the Commonwealth.
"Ending home value." The value of residential property
subject to a shared equity agreement at the time of settlement.
"Homeowner." The owner of residential property that is
subject to a shared equity agreement.
"Instrumentality created by the United States or any state."
Any of the following:
(1) A Federal, state or municipal government, quasi-
governmental entity or nonprofit agency or corporation
incorporated under the laws of this Commonwealth that has
tax-exempt status under 26 U.S.C. § 501(c)(3) (relating to
exemption from tax on corporations, certain trusts, etc.) and
that exclusively engages in:
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(i) making shared equity agreements on residential
property financed with public money; or
(ii) negotiating, placing, assisting in the
placement of, finding or offering to negotiate, place,
assist in the placement of or find shared equity
agreements on residential property financed with public
money only under a contract with the Federal Government,
a state or municipal government, an instrumentality of
the government or a quasi-governmental entity, as
determined by the department.
(2) A person named as the investor in the legal
documents for a shared equity agreement, if the person
otherwise meets the requirements of paragraph (1).
"Multistate licensing system." A licensing system developed
and maintained by the Conference of State Bank Supervisors.
"Residential property." Real property located in this
Commonwealth containing a dwelling house with accommodations for
four or fewer separate households and occupied in whole or in
part by either of the following:
(1) The homeowner who obtained the shared equity
agreement or, if the homeowner is deceased, the homeowner's
heirs.
(2) A tenant who pays rent directly to the homeowner.
"Senior secured debt." An obligation secured by a lien on
residential property that would be senior to the lien securing
obligations under a shared equity agreement after application of
proceeds from the shared equity agreement at closing to reduce
the amount of the obligation.
"Settle" or "settlement." The process by which a homeowner
terminates a shared equity agreement in accordance with the
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terms of the shared equity agreement.
"Settlement payment." The dollar amount that a homeowner is
required to pay to settle a shared equity agreement.
"Shared equity agreement." As follows:
(1) A nonrecourse transaction under which a shared
equity provider advances a sum of money to a homeowner and,
in exchange, obtains a mortgage on the residential property
and either:
(i) an equity interest in the residential property;
or
(ii) a future obligation to pay a sum that may vary
based on future home value upon the occurrence of one or
more subsequent conditions.
(2) The term does not include a reverse mortgage
transaction as defined in 12 CFR 1026.33(a) (relating to
requirements for reverse mortgages).
"Shared equity provider." A person engaged in the business
of making, holding or servicing shared equity agreements.
"Starting home equity." The homeowner's equity in
residential property as of the effective date of the shared
equity agreement, expressed as a percentage, determined by:
(1) adding the senior secured debt and the transaction
amount;
(2) dividing the sum under paragraph (1) by the starting
home value; and
(3) subtracting the quotient under paragraph (2) from
one.
"Starting home value." The value of residential property
subject to a shared equity agreement at the time of origination,
as agreed to by the homeowner and the shared equity provider.
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"Transaction amount." The gross amount provided by the
shared equity provider in residential property subject to a
shared equity agreement before deduction of third-party fees or
amounts charged by the shared equity provider.
SUBCHAPTER B
LICENSING AND ADMINISTRATION
Sec.
6311. License required and exemptions.
6312. Application for license.
6313. Issuance, denial and appeal.
6314. Renewal of license.
6315. Notice of certain changes.
6316. Duties of department.
§ 6311. License required and exemptions.
(a) License required.--Except as provided under subsection
(b), a person may not engage in the business of making or
servicing shared equity agreements relating to residential
property in this Commonwealth unless the person is licensed by
the department under this chapter.
(b) Exemptions.--Subsection (a) shall not apply to:
(1) An individual employed by or associated with a
licensed shared equity provider who acts for the licensed
shared equity provider under the supervision of the licensed
shared equity provider.
(2) Any of the following:
(i) A bank as defined in section 102(f) of the act
of November 30, 1965 (P.L.847, No.356), known as the
Banking Code of 1965.
(ii) A national banking association.
(iii) A federally chartered credit union.
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(iv) A Federal savings association, Federal savings
bank or Federal savings and loan association.
(v) An insurance company.
(vi) A bank, trust company, savings bank, savings
and loan association, credit union or insurance company
organized under the laws of another state.
(vii) A subsidiary or affiliate of an entity under
subparagraph (i), (ii), (iii), (iv), (v) or (vi), as
determined by the department.
(viii) A bank holding company established under
Federal or State law.
(3) An instrumentality created by the United States or
any state.
§ 6312. Application for license.
(a) Contents.--An application for a license under this
chapter shall be submitted to the department in a form and
manner determined by the department and shall include all of the
following:
(1) The name of the applicant.
(2) The address of the principal place of business of
the applicant.
(3) The address of each additional location at which the
applicant conducts or proposes to conduct business under this
chapter.
(4) If the applicant is not an individual, the name and
address of each control person.
(5) Any other information required by the department.
(b) Investigation.--The department may investigate an
applicant and each control person of an applicant to determine
whether the applicant satisfies the requirements for licensure
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under this chapter.
(c) Criminal history record information.--As part of an
investigation under subsection (b), the department may require
an applicant and each control person of an applicant to submit
fingerprints and may obtain State criminal history record
information and national criminal history record information in
accordance with section 405 of the act of May 15, 1933 (P.L.565,
No.111), known as the Department of Banking and Securities Code.
A private entity may not receive criminal history record
information under this subsection.
(d) Fees.--An application under this section shall be
accompanied by an investigation fee and an initial application
fee of $5,000. The department shall determine the amount of the
investigation fee.
(e) Multistate licensing system.--The department may
participate in a multistate licensing system for shared equity
providers and may establish requirements for participation in
the system. The requirements may vary from other provisions of
this chapter to the extent necessary to facilitate participation
in the system. An applicant shall pay directly to the multistate
licensing system any fee required for participation in the
system.
(f) Privacy and security.--If the department participates in
a multistate licensing system under subsection (e), the
department shall ensure that the system maintains appropriate
privacy, data security and security breach notification
policies.
§ 6313. Issuance, denial and appeal.
(a) Issuance.--The department shall issue a license to an
applicant under this chapter if the department finds that all of
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the following apply:
(1) The applicant has complied with this chapter.
(2) The financial responsibility, character, reputation,
integrity and general fitness of the applicant warrant the
belief that the business will be operated honestly, fairly,
soundly and efficiently in the public interest and in a
manner consistent with the purposes of this chapter.
(3) If the applicant is a partnership or association,
the financial responsibility, character, reputation,
integrity and general fitness of each partner or member
satisfy the standard under paragraph (2).
(4) If the applicant is a corporation or other legal
entity, the financial responsibility, character, reputation,
integrity and general fitness of each officer, director and
control person satisfy the standard under paragraph (2).
(b) Denial.--If the department does not make the findings
required under subsection (a), the department may deny the
application.
(c) Time for action.--Within 60 days after receiving a
completed application, the department shall issue a license or
deny the application.
(d) Notice.--If the department denies an application, the
department shall notify the applicant in writing of the denial
and the reasons for the denial.
(e) Appeal.--An applicant may appeal a denial under 2
Pa.C.S. Chs. 5 Subch. A (relating to practice and procedure of
Commonwealth agencies) and 7 Subch. A (relating to judicial
review of Commonwealth agency action).
§ 6314. Renewal of license.
(a) License contents and status.--A license issued under
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this chapter shall state the name of the licensee and the
address at which the licensee conducts business under this
chapter, may not be transferred or assigned and shall expire
annually unless the licensee renews the license in accordance
with this section.
(b) Name on license.--A licensee shall conduct business
under this chapter in the name that appears on the license.
(c) Renewal application.--A licensee may renew a license by
filing a renewal application with the department in a form and
manner determined by the department. The renewal application
shall include the information required by the department to
determine whether the licensee continues to satisfy the
requirements of this chapter and shall be accompanied by a
renewal fee of not more than $2,500, as determined by the
department.
(d) Renewal and denial.--The department may renew a license
if the department finds that the licensee continues to satisfy
the requirements of this chapter. If the department determines
that a licensee does not satisfy the requirements of this
chapter, the department may deny the renewal application.
(e) Notice and appeal.--If the department denies a renewal
application, the department shall notify the licensee in writing
of the denial and the reasons for the denial. A licensee may
appeal a denial under 2 Pa.C.S. Chs. 5 Subch. A (relating to
practice and procedure of Commonwealth agencies) and 7 Subch. A
(relating to judicial review of Commonwealth agency action).
(f) Multistate licensing system.--If the department
participates in a multistate licensing system under section
6312(e) (relating to application for license), the department
may require a licensee to file a renewal application through the
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multistate licensing system.
§ 6315. Notice of certain changes.
(a) Notice.--A licensee shall notify the department, in a
form and manner determined by the department, of a material
change in information submitted in an application for a license
or for renewal of a license under this chapter.
(b) Time for notice.--A licensee shall provide notice under
subsection (a) no later than 10 days after the material change
occurs or the licensee receives notice of the material change.
(c) Material changes.--A material change under this section
shall include any of the following:
(1) A change in the name of the licensee.
(2) A change in the address of the principal place of
business of the licensee.
(3) A change in the address of a location at which the
licensee conducts business under this chapter.
(4) If the licensee is not an individual, a change in a
control person of the licensee, including the name, address
and occupation of each new control person.
(5) Any other change that the department determines is
material.
(d) Additional information.--At the request of the
department, a licensee shall provide additional information
relating to a notice under this section.
§ 6316. Duties of department.
(a) Duties.--The department shall have the following duties:
(1) Examine an instrument, document, account, book,
record or file of a licensee or a person connected with a
licensee and conduct any other investigation necessary to
administer this chapter. In connection with an examination or
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investigation under this paragraph, the department may remove
an instrument, document, account, book, record or file of a
licensee to a location outside the office of the licensee.
The licensee or other entity subject to examination shall pay
the cost of the examination.
(2) Conduct an administrative hearing on a matter
pertaining to this chapter, issue a subpoena to compel the
attendance of a witness and the production of an instrument,
document, account, book or record and retain an instrument,
document, account, book or record until completion of the
proceeding in connection with which the instrument, document,
account, book or record was produced. A department official
may administer an oath or affirmation to a person whose
testimony is required. If a person fails to comply with a
subpoena issued by the department or to testify on a matter
concerning which the person may be lawfully interrogated,
Commonwealth Court, on application of the department, may
issue an order requiring the attendance of the person, the
production of the instrument, document, account, book or
record and the giving of testimony.
(3) Request and receive information or a record of any
kind, including a report of criminal history record
information, from a Federal, State, local or foreign
government entity regarding an applicant, licensee or person
related to the business of the applicant or licensee. The
applicant or licensee shall pay the cost of obtaining the
information or record.
(4) Promulgate regulations and issue statements of
policy or orders necessary for the proper conduct of business
under this chapter, the issuance and renewal of licenses and
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the enforcement of this chapter.
(5) Prohibit or permanently remove a person or licensee
responsible for a violation of this chapter from working in
the person's or licensee's present capacity or in any other
capacity related to an activity regulated by the department.
(6) Order a person or licensee to make restitution for
actual damages to a homeowner caused by a violation of this
chapter.
(7) Issue a cease and desist order that is effective
immediately, subject to a hearing within 14 days after
issuance of the order.
(8) Impose any other condition that the department deems
appropriate.
(b) Hearings.--A person aggrieved by a decision of the
department may appeal the decision to the commission. The appeal
shall be conducted under 2 Pa.C.S. Ch. 5 Subch. A (relating to
practice and procedure of Commonwealth agencies).
(c) Injunctions.--The department may maintain an action for
an injunction or other process against a person to restrain and
prevent the person from engaging in an activity that violates
this chapter.
(d) Final orders.--A decision of the commission or an
unappealed order of the department shall constitute a final
order of the department and shall be enforceable in a court of
competent jurisdiction. Subject to redaction or modification
necessary to preserve confidentiality, the department may
publish a final adjudication issued under this section. The
department shall regularly report violations of this chapter,
enforcement actions and other relevant information to the
multistate licensing system if the department participates in
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the system under section 6312(e) (relating to application for
license).
(e) Appeals.--A person aggrieved by a decision of the
commission may appeal the decision under 2 Pa.C.S. Ch. 7 Subch.
A (relating to judicial review of Commonwealth agency action).
(f) Reports.--No later than 12 months after the effective
date of this subsection, and annually thereafter, the department
shall submit a report detailing the compliance of licensees with
Subchapter C (relating to shared equity agreements). The
department shall submit the report to the chairperson and
minority chairperson of the Banking and Insurance Committee of
the Senate and the chairperson and minority chairperson of the
Commerce Committee of the House of Representatives.
SUBCHAPTER C
SHARED EQUITY AGREEMENTS
Sec.
6321. Requirements for shared equity agreements.
6322. Disclosure requirements.
6323. Additional protective provisions.
6324. Prohibited terms and practices.
§ 6321. Requirements for shared equity agreements.
A shared equity provider may not enter into a shared equity
agreement unless all of the following apply:
(1) The homeowner is given at least three business days
to rescind acceptance of the shared equity agreement before
the agreement becomes effective and binding on the homeowner.
The homeowner may exercise the right of rescission by
providing written notice to the shared equity provider within
the rescission period.
(2) Except in connection with a home purchase
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transaction, the homeowner's starting home equity is equal to
or greater than 10%. If a portion of the transaction amount
will be used to pay down an existing obligation secured by
the residential property, the homeowner's starting home
equity shall be calculated after application of that portion
of the transaction amount to the obligation.
(3) The starting home value and ending home value
determined by an appraisal or other valuation report that
complies with the Uniform Standards of Professional Appraisal
Practice on the effective date of this paragraph.
(4) The homeowner is given a copy of each appraisal or
valuation report used to determine the starting home value
and ending home value.
(5) The settlement payment does not exceed the total
principal and interest that the homeowner would have lawfully
paid over the same period if the transaction amount had been
the principal balance on a forward residential mortgage loan
subject to the maximum lawful rate of interest under Article
III of the act of January 30, 1974 (P.L.13, No.6), referred
to as the Loan Interest and Protection Law, at the time of
the transaction.
(6) The homeowner completes independent shared equity
agreement counseling by a counselor approved by the United
States Department of Housing and Urban Development to provide
counseling for a Home Equity Conversion Mortgage or by
another person authorized by the department under criteria
established by the department by regulation. The criteria
shall include counselor qualifications, the content of the
counseling session, the manner in which counseling shall be
provided and documentation and recordkeeping requirements.
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(7) The shared equity provider has evaluated the
homeowner's willingness and capacity to timely meet the
homeowner's financial obligations and comply with the
requirements of the shared equity agreement and has
determined that the shared equity agreement represents a
sustainable solution to the homeowner's financial
circumstances. In making the evaluation, the shared equity
provider shall conduct a financial assessment consistent with
the assessment required to determine whether and to what
extent a Home Equity Conversion Mortgage will be subject to a
Loan Expectancy Set Aside under 24 CFR 206.205(b) (relating
to property charges), as reflected in the Home Equity
Conversion Mortgage Financial Assessment and Property Charge
Guide, revised July 13, 2016. If the shared equity provider
determines that the homeowner's income is insufficient to
meet the homeowner's needs and comply with the requirements
imposed by the shared equity agreement, including any other
mortgage payment and payments for property taxes and
homeowner's insurance, the shared equity provider may not
enter into the shared equity agreement.
(8) The shared equity provider has provided the
disclosures required under 15 U.S.C. Ch. 41 Subch. I
(relating to consumer credit cost disclosure) and 12 U.S.C.
Ch. 27 (relating to real estate settlement procedures), and
regulations promulgated thereunder.
(9) The shared equity provider has disclosed on the
first page of the shared equity agreement the maximum amount,
stated in dollars, that the homeowner may be required to pay
under the shared equity agreement.
(10) Each appraisal of the residential property has been
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conducted by a certified or licensed appraiser in accordance
with the Uniform Standards of Professional Appraisal Practice
on the effective date of this paragraph and by an appraiser
that is not affiliated with the shared equity provider.
(11) The shared equity provider has received
documentation that the homeowner completed counseling from a
counselor approved by the United States Department of Housing
and Urban Development to provide counseling for a Home Equity
Conversion Mortgage or by another person authorized by the
department. The documentation must show that the homeowner
received counseling on the cost, affordability and risks of
the shared equity agreement and that, by the time of the
counseling session, the counselor had received a copy of the
shared equity agreement and a cost disclosure form comparable
to the disclosures required under section 6322 (relating to
disclosure requirements).
(12) At the time the shared equity agreement is
executed, the shared equity provider provides the homeowner
contemporaneous access to a knowledgeable representative of
the shared equity provider who is able to answer the
homeowner's questions about the transaction.
(13) The shared equity provider has complied with
section 6322.
§ 6322. Disclosure requirements.
(a) Disclosure required.--A shared equity provider shall
provide the disclosures required under this section to the
homeowner in a form determined by the department and in a form
that the homeowner may keep. The final disclosure under
subsection (c) shall be provided at least 30 business days
before the homeowner enters into a shared equity agreement.
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(b) Initial disclosure.--Within three business days after a
homeowner inquires about a shared equity agreement, a shared
equity provider shall give the homeowner an initial disclosure,
in a form determined by the department, stating all of the
following:
(1) A mortgage lien will be placed on the residential
property.
(2) Failure to comply with the terms of the shared
equity agreement, or inability to settle the shared equity
agreement, may result in the homeowner losing the residential
property.
(3) The homeowner should consider obtaining the advice
of an attorney before entering into the shared equity
agreement.
(c) Final disclosure.--At least 30 business days before a
homeowner enters into a shared equity agreement, a shared equity
provider shall give the homeowner a final disclosure, in a form
determined by the department, that the homeowner may keep and
that includes all of the following in the following order:
(1) A clear and conspicuous statement of all of the
following:
(i) The maximum dollar amount that the homeowner may
be required to pay under the shared equity agreement.
(ii) The conditions that trigger the obligation to
make a settlement payment.
(iii) The manner in which the settlement payment
will be calculated.
(iv) That, although the homeowner is not required to
make periodic payments to the shared equity provider
during the term of the shared equity agreement, the
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homeowner remains responsible for payments due under any
other mortgage and for property taxes, homeowner's
insurance and homeowners association fees, if applicable.
(v) The requirement to complete counseling before
entering into the shared equity agreement.
(vi) That the homeowner may reject or cancel the
offer until three business days after closing and the
manner in which the homeowner may exercise that right.
(vii) The transaction amount, expressed as a
percentage of the value of the residential property as
determined by appraisal or other valuation.
(viii) The maximum settlement amount, expressed as a
percentage of the value of the residential property as
determined by appraisal or other valuation, that may be
payable to the shared equity provider on termination of
the shared equity agreement.
(2) A copy of each document that the homeowner will be
required to sign to enter into the shared equity agreement,
including all of the following:
(i) The shared equity agreement.
(ii) Each disclosure required by 15 U.S.C. Ch. 41
Subch. I (relating to consumer credit cost disclosure)
and 12 U.S.C. Ch. 27 (relating to real estate settlement
procedures), and regulations promulgated thereunder.
(iii) Any other disclosure or document required by
the department.
§ 6323. Additional protective provisions .
(a) Duties.--With respect to residential property, a shared
equity provider shall have the following duties:
(1) Provide the disclosures required under 15 U.S.C. Ch.
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41 Subch. I (relating to consumer credit cost disclosure) and
12 U.S.C. Ch. 27 (relating to real estate settlement
procedures), and regulations promulgated thereunder.
(2) Provide the homeowner at least 90 days' written
notice of an action required of the homeowner under the terms
of the shared equity agreement if failure to timely take the
action will affect the rights or interests of the homeowner
under the agreement.
(3) Provide the homeowner, within three business days
after the homeowner requests it and at no cost to the
homeowner, a payoff quote itemizing each amount that the
homeowner is liable to pay to the shared equity provider.
(4) Provide the homeowner, within three business days
after the homeowner requests it, a written description of the
process for terminating the shared equity agreement.
(5) Provide credit for an improvement made by the
homeowner to the property securing the shared equity
agreement in an amount equal to the greater of the funds paid
for the improvement or the increase in appraised value
resulting from the improvement.
(6) Ensure that an adjustment for lack of maintenance or
for an improvement is determined by a property appraisal that
complies with the Uniform Standards of Professional Appraisal
Practice on the effective date of this paragraph.
(7) Bring an action to enforce a shared equity agreement
relating to residential property located in this Commonwealth
in a court of competent jurisdiction and comply with the
Pennsylvania Rules of Civil Procedure governing mortgage
foreclosure actions.
(b) Notice before legal proceedings.--Before commencing a
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legal proceeding to recover residential property, a shared
equity provider shall give the homeowner at least 30 days'
written notice of the shared equity provider's intention to do
so.
(c) Form and contents of notice.--A notice under subsection
(b) shall be in writing and sent to the homeowner by registered
or certified mail at the homeowner's last known address and, if
different, at the residence that is the subject to the shared
equity agreement. The notice shall clearly and conspicuously
state all of the following:
(1) The particular obligation or real estate security
interest.
(2) The nature of the claimed default.
(3) The right of the homeowner to cure the default under
subsection (d) and exactly what performance, including the
amount of money, if any, must be tendered to cure the
default.
(4) The time within which the homeowner must cure the
default.
(5) The method by which the homeowner's ownership or
possession of the real estate may be terminated.
(6) The right of the homeowner, if any, to transfer the
real estate to another person subject to the security
interest or to refinance the obligation and the right of the
transferee, if any, to cure the default.
(d) Cure of default.--After a notice under subsection (b)
has been given, the homeowner or another person acting on the
homeowner's behalf may, at any time not later than one hour
before the commencement of bidding at a sheriff sale or other
judicial sale of the residential property and not more than
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three times in a calendar year, cure the default and prevent
sale or other disposition of the real estate and avoid
acceleration, if any, by tendering the amount or performance
specified in subsection (e).
(e) Requirements to cure default.--To cure a default under
subsection (d), the homeowner shall engage in all of the
following:
(1) Pay or tender, in the form of cash, cashier's check
or certified check, all sums that would have been due at the
time of payment or tender in the absence of default and the
exercise of an acceleration clause, if any.
(2) Perform any other obligation that the homeowner
would have been bound to perform in the absence of default.
(3) Pay or tender any reasonable fee allowed under
section 6324(7) (relating to prohibited terms and practices)
and the reasonable cost of proceeding to foreclosure, as
specified in writing by the shared equity provider, actually
incurred to the date of payment.
(4) Pay any reasonable late penalty, if provided for in
the security document.
(f) Effect of cure.--Cure of a default under subsection (d)
restores the homeowner to the same position as if the default
had not occurred.
(g) Prepayment.--A shared equity agreement entered into on
or after the effective date of this subsection may be prepaid,
without penalty or other charge for prepayment, at any time
before the end of the term of the agreement.
(h) Confession of judgment.--A plaintiff may not levy,
execute or garnish on the basis of a judgment or decree on
confession, whether by amicable action or otherwise, on a shared
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equity agreement or other similar instrument in writing
confessing judgment until the plaintiff, in accordance with the
Pennsylvania Rules of Civil Procedure, files an appropriate
action and proceeds to judgment or decree against the defendant
as in an original action. The court shall modify the judgment by
confession as appropriate by a judgment, order or decree entered
in the action. After the original action has been prosecuted and
a judgment obtained, that judgment shall merge with the
confessed judgment, the confessed judgment shall be conformed as
to amount and execution shall be had on the confessed judgment.
The parties to the action shall have the same rights as parties
to another original proceeding. Nothing in this subsection shall
prohibit a shared equity provider from proceeding by mortgage
foreclosure action in lieu of confession of judgment.
(i) Excess settlement payment.--If a settlement payment
exceeds the amount permitted by this chapter, the homeowner
shall not be required to pay the excess over the maximum
settlement payment under section 6321(5) (relating to
requirements for shared equity agreements), and the homeowner
may retain and deduct the excess from the amount of the debt.
(j) Waiver prohibited.--A provision of this chapter may not
be waived by an oral or written agreement.
§ 6324. Prohibited terms and practices.
A shared equity provider may not:
(1) Charge a penalty for settlement of a shared equity
agreement before the end of the stated term of the agreement.
(2) Use a risk adjustment to calculate the appreciation
of residential property.
(3) Prohibit a homeowner from, or penalize a homeowner
for, renting or otherwise using residential property as the
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homeowner chooses if the use complies with applicable law.
(4) Agree to a property valuation that differs from the
value determined by appraisal under section 6321(10)
(relating to requirements for shared equity agreements) .
(5) Include in a shared equity agreement any of the
following:
(i) An arbitration clause.
(ii) A clause that constitutes or contains a
cognovit, confession of judgment, warrant of attorney or
other waiver of the right to notice and the opportunity
to be heard in the event of suit or process thereon.
(iii) A clause that purports to authorize the shared
equity provider to obtain a power of attorney from the
homeowner and sell the residential property.
(iv) A clause that purports to limit the homeowner's
right to a jury trial.
(6) Include in a shared equity agreement a provision
that prohibits the homeowner from refinancing a mortgage or
other lien on residential property that is the homeowner's
primary residence.
(7) Contract for or receive attorney fees that are
inconsistent with the attorney fees allowed under section 406
of the act of January 30, 1974 (P.L.13, No.6), referred to as
the Loan Interest and Protection Law.
(8) Charge an amount to settle a shared equity agreement
that exceeds the amount permitted under section 6321(5).
(9) Include in a shared equity agreement a provision
that allows the shared equity provider to require a
settlement payment less than 30 years after the date of
execution of the agreement.
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SUBCHAPTER D
ENFORCEMENT
Sec.
6331. Suspension, revocation or refusal.
6332. Homeowner remedies.
§ 6331. Suspension, revocation or refusal.
(a) Departmental action.--The department may suspend, revoke
or refuse to issue or renew a license if a licensee or a
director, officer, partner, employee or owner of a licensee has
done any of the following:
(1) Made a material misstatement in an application or in
a report or submission required by this chapter or by a
regulation, statement of policy or order of the department.
(2) Failed to comply with or violated a provision of
this chapter or a regulation, statement of policy or order
promulgated or issued by the department under this chapter.
(3) Engaged in dishonest, fraudulent or illegal conduct
in a business or unfair or unethical conduct in connection
with the business of making, holding or servicing shared
equity agreements.
(4) Been convicted of or pleaded guilty or nolo
contendere to a felony or a crime involving moral turpitude.
(5) Been permanently or temporarily enjoined by a court
of competent jurisdiction from engaging in or continuing
conduct or a practice involving the business of making,
holding or servicing shared equity agreements.
(6) Become the subject of an order of the department
denying, suspending or revoking a license applied for or
issued under this chapter.
(7) Become the subject of a fraud order of the United
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States Postal Service.
(8) Failed to comply with the requirements of this
chapter to make and keep records required by regulation,
statement of policy or order of the department, to produce
records required by the department or to file financial
reports or other information that the department requires by
regulation, statement of policy or order.
(9) Become the subject of an order of the department
denying, suspending or revoking a license under another law
administered by the department.
(10) Demonstrated negligence or incompetence in
performing an act for which the licensee is required to hold
a license under this chapter.
(11) Become insolvent, meaning that the liabilities of
the applicant or licensee exceed the assets of the applicant
or licensee, that the applicant or licensee cannot meet
obligations as they mature or that the applicant or licensee
is in such financial condition that the applicant or licensee
cannot continue in business with safety to customers.
(12) Failed to comply with the terms of an agreement
under which the department authorizes a licensee to maintain
records at a place other than the licensee's principal place
of business.
(b) Reinstatement.--The department may reinstate a license
previously suspended, revoked or denied renewal if all of the
following apply:
(1) The condition that warranted the original action has
been corrected to the satisfaction of the department.
(2) The department has reason to believe that the
condition is not likely to recur.
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(3) The licensee satisfies all other requirements of
this chapter.
(c) Penalties.--A person subject to this chapter that is not
licensed by the department and that violates a provision of this
chapter or commits an act that would subject a licensee to
suspension, revocation or refusal to renew under this section
may be fined by the department up to $10,000 for each offense. A
person licensed under this chapter, or a director, officer,
owner, partner, employee or agent of a licensee, that violates a
provision of this chapter or commits an act that would subject
the licensee to suspension, revocation or refusal to renew under
this section may be fined by the department up to $10,000 for
each offense.
§ 6332. Homeowner remedies.
(a) Civil action.--A homeowner affected by a violation of
section 6321 (relating to requirements for shared equity
agreements), 6322 (relating to disclosure requirements), 6323
(relating to additional protective provisions) or 6324 (relating
to prohibited terms and practices) may bring an action in court
of competent jurisdiction for damages arising from the
violation, including punitive damages, costs, reasonable
attorney fees and other relief to which the homeowner may be
entitled under law or equity.
(b) Treble damages.--In addition to the remedies under
subsection (a), a homeowner that has made a settlement payment
in an amount that exceeds the amount permitted by this chapter
or other law, or that has paid a charge prohibited by or in
excess of the amount allowed by this chapter or other law, may
recover three times the amount of the excess settlement payment
or charge from the person that collected the excess settlement
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payment or charge.
(c) Costs and attorney fees.--If a homeowner prevails in an
action under this chapter, the homeowner shall recover costs and
expenses that the court determines were reasonably incurred in
connection with the prosecution of the action, together with a
reasonable attorney fee.
(d) Construction.--Nothing in this chapter shall be
construed to limit the right of a homeowner to bring an action
under any other applicable Federal or State law for a violation
of this chapter.
SUBCHAPTER E
MISCELLANEOUS PROVISIONS
Sec.
6341. Temporary moratorium.
6342. Regulations.
§ 6341. Temporary moratorium.
(a) Prohibition.--A person may not offer, arrange,
negotiate, enter into or make a shared equity agreement with a
homeowner relating to residential property in this Commonwealth
before the effective date of Subchapter C (relating to shared
equity agreements).
(b) Construction.--Nothing in this section shall be
construed to impair the enforcement of a shared equity agreement
lawfully entered into before the effective date of this
subsection.
§ 6342. Regulations.
The department shall promulgate regulations as necessary to
administer and enforce this chapter.
Section 2. This act shall take effect as follows:
(1) The following shall take effect immediately:
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The addition of 7 Pa.C.S. Ch. 63 Subchs. A and E.
This section.
(2) The addition of 7 Pa.C.S. Ch. 63 Subch. B shall take
effect in 180 days.
(3) The remainder of this act shall take effect in 60
days.
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