711 - Payment on account of increased mortgage costs.
§ 711. Payment on account of increased mortgage costs. (a) Reimbursement of owner.--Whenever the acquisition of property by an acquiring agency results in the termination of an installment purchase contract, mortgage or other evidence of debt on the acquired property, requiring the legal or equitable owner to enter into another installment purchase contract, mortgage or other evidence of debt on the property purchased for the same use as the acquired property, a legal or equitable owner who does not qualify for a payment under section 903(a)(2) (relating to replacement housing for homeowners) shall be compensated for any increased interest and other debt service costs which the owner is required to pay for financing the acquisition of the replacement property. (b) Determination of amount.-- (1) Compensation for any increased interest and other debt service costs shall be equal to the excess in the aggregate interest and other debt service costs of that amount on the principal of the installment purchase contract, mortgage or other evidence of debt on the replacement property which is equal to the unpaid balance of the installment purchase contract, mortgage or other evidence of debt on the acquired property over the remaining term of the installment purchase contract, mortgage or other evidence of debt on the acquired property reduced to present worth. (2) The discount rate to be used in reducing to present worth shall be the prevailing interest rate paid on savings deposits by commercial banks in the general area in which the replacement property is located. (3) The amount shall be paid only if the acquired property was subject to an installment purchase contract or encumbered by a bona fide mortgage or other evidence of debt secured by the property which was a valid lien on the property for not less than 180 days prior to the initiation of negotiations for the acquisition of the property.