Section 6-f of the Banking Law authorizes the superintendent to adopt rules and regulations relating to shared appreciation mortgages (certain terms used in this Part are defined in section 83.2 of this Part). Accordingly, these regulations permit banks, trust companies, foreign banking corporations licensed to maintain a branch or agency in this State, savings banks, savings and loan associations, credit unions and persons and entities engaging in the business described in section 590 of the Banking Law (lender), to make residential mortgage loans, which provide for the lender, or its assignee (together with lender, hereinafter defined as holder) to receive a share in the future appreciation of the property serving as security for the loan.

Section 6-f provides that a holder may enter into a written agreement with a mortgagor under which the holder conditionally reduces an amount of principal of the then outstanding mortgage loan in order to assist a mortgagor at risk of foreclosure. The written agreement may permit the holder to share in the appreciation of the market value of the residential property securing such loan.