Connecticut Origination Reference Guide
- Kacey Olson (Unlicensed)
Owned by Kacey Olson (Unlicensed)
| Citation | Topic | Requirement |
| The Banking Law of Connecticut / Conn. Gen. Stat. Ann. §36a-755(c) | Appraisal Disclosure | A lender that imposes a fee on any applicant for an appraisal must either: (1) notify the applicant in writing of the availability of a copy of the appraisal report; or (2) provide the applicant with a copy of the appraisal report at no charge, the notice or copy to be provided not later than 10 days after receipt of the appraisal report, but in any event not later than the date on which the sale of the property is to be consummated. |
| The Banking Law of Connecticut / Conn. Gen. Stat. Ann. §36a-746e(8) | Borrower Benefit Worksheet | A lender may not make a high cost home loan unless the lender reasonably believes at the time the loan is consummated that the borrower will be able to make the scheduled payments to repay the loan based upon a consideration of the borrower's current and expected income, current obligations, employment status, and other financial resources, excluding the borrower's equity in the dwelling that secures repayment of the loan. The borrower will be presumed to be able to make the scheduled payments to repay the loan if at the time the loan is consummated, or at the time of the first rate adjustment in the case of a lower introductory interest rate, the borrower's monthly debts, including amounts owed under the mortgage, do not exceed 50% of the borrower's monthly gross income, as verified by the borrower's signed financial statement, a credit report, and payment records for employment income. |
| The Banking Law of Connecticut / Conn. Gen. Stat. Ann. §36a-706(d) | Commitment Letter | If a written first mortgage loan commitment issued by a mortgage lender contains any conditions to be satisfied by the applicant, the mortgage lender must specify a closing date no sooner than 7 calendar days after the issuance of the commitment unless an earlier date is requested by the applicant. If the mortgage lender requires that the closing of the first mortgage loan be conducted by a particular attorney or law firm, and that attorney or law firm is not available to conduct the closing before a first mortgage loan commitment period or rate lock-in period expires, the mortgage lender must extend the commitment or rate lock-in period until the designated attorney is available to conduct the closing. |
| Mortgages and Liens / Conn. Gen. Stat. Ann. §49-6a(b) | Disclosure of No Interim Financing | A lender who has a policy of not offering interim financing must disclose the policy to the applicant in writing in plain language at the time the mortgage loan application is filed. The applicant must sign the disclosure statement to acknowledge its receipt. |
| Real Estate Brokers and Salespersons / Conn. Gen. Stat. Ann. §20-325c | Dual Capacity Disclosure | A real estate broker or real estate salesperson, and any person affiliated with the broker or salesperson, who receives a fee, commission or other valuable consideration for the sale of residential real property, may not receive a fee, commission or other valuable consideration for negotiating, soliciting, arranging, placing or finding a first mortgage loan for the buyer in connection with the same sale unless disclosure is made as set forth below. The disclosure must be made to and acknowledged by the buyer prior to the time the buyer signs a contract with the real estate broker or salesperson for mortgage brokering services. |
| The Banking Law of Connecticut / Conn. Gen. Stat. Ann. §36a-746b | High-Cost Loan Disclosure | A lender making a high cost home loan must disclose to the prospective borrower the following statement: You are not required to complete this agreement merely because you have received these disclosures or have signed a loan application. If you obtain this loan, the lender will have a mortgage on your home. You could lose your home, and any money you have put into it, if you do not meet your obligations under the loan. The lender must also disclose to the prospective borrower: (1) the annual percentage rate; (2) the amount of the regular monthly payment or other periodic payment; and (3) for variable-rate transactions, a statement that the interest rate and monthly payment may increase, and the amount of the single maximum monthly payment, based on the maximum interest rate that may be imposed during the term of the loan. |
| The Banking Law of Connecticut / Conn. Gen. Stat. Ann. §36a-726(b) | Higher Interest Rate in Lieu of Private Mortgage Insurance Disclosure | A mortgage lender who does not require mortgage insurance but does charge a higher interest rate for first mortgage loans in excess of 80% loan-to-value ratio must disclose this fact to the applicant in writing at the time the first mortgage loan application is filed. |
| Nondepository Mortgage Lenders and Brokers Act / Conn. Gen. Stat. Ann. §36a-498(h) | Increased Interest Rate after Default | With respect to an application for a mortgage loan received on or after October 1, 2009, no mortgage lender or correspondent mortgage lender may include in a mortgage loan a provision that increases the interest rate as a result of a default other than a failure to comply with a provision to maintain an automatic electronic payment feature where the maintenance provision has been provided in return for an interest rate reduction and the increase is no greater than the reduction. |
| Mortgages and Liens / Conn. Gen. Stat. Ann. §49-6d. | Legal Representation Notice | Lenders must notify borrowers in writing when a mortgage loan application is filed that the borrower: (1) may have legal interests that differ from the lenders; (2) may not be required by the lender to be represented by the lender's attorney; (3) may waive the right to be represented by an attorney; and (4) may direct any complaints concerning violations to the Department. |
| Mortgages and Liens / Conn. Gen. Stat. Ann. §49-7a | Multiple Original Notes | No lender may require a borrower, as a condition of obtaining a loan, to sign multiple original notes to evidence the loan. |
| The Banking Law of Connecticut / Conn. Gen. Stat. Ann. §36a-760c(a) | Non-Prime Home Loan Counseling Notice | No lender may make a nonprime home loan where all or a portion of the proceeds are used to fully or partially pay off a special mortgage on the same property unless the borrower has obtained a written certification from a counselor with an independent third-party nonprofit organization approved by the United States Department of Housing and Urban Development that the borrower has received mortgage counseling. For purposes of this section, “special mortgage” means a loan originated, subsidized or guaranteed by or through a state, federal, tribal or local government, or nonprofit organization. |
| The Banking Law of Connecticut / Conn. Gen. Stat. Ann. §36a-760a(c) | Notification of the Terms of the Transaction | In connection with a non-prime home loan that is a first mortgage loan, a lender must provide the borrower with a notice or letter that generally describes the terms of the transaction. The notice or letter must be provided no later than 3 business days prior to the closing, unless the borrower expressly requests an expedited closing and the lender has not yet, acting in good faith, provided the letter or notice. In cases where a letter or notice is required, the lender must notify the borrower, within a reasonable time period, of any subsequent material changes to the terms of the transaction. |
| The Banking Law of Connecticut / Conn. Gen. Stat. Ann. §36a-746e(3) | Prepaid Finance Charges | A lender making a high cost home loan may not charge, impose or cause to be paid, directly or indirectly, prepaid finance charges that exceed in the aggregate, the greater of 5% of the principal loan amount or $2,000. If the proceeds of a high cost home loan are used to refinance an existing loan, the total of the prepaid finance charges for the current refinancing and any previous high cost home loan financings or financings pursuant to Conn. Gen. Stat. Ann. §36a-498a by the same lender or its affiliate within 2 years of the current refinancing may not exceed the greater of 5% of the principal amount of the initial loan or $2,000. A lender is not prohibited from charging, imposing or causing to be paid, directly or indirectly, prepaid finance charges in addition to those permitted above in connection with any additional proceeds received by the borrower in the refinancing, provided the prepaid finance charges on the additional proceeds do not exceed 5% of the additional proceeds. “Additional proceeds” means: (1) for a closed-end loan, the amount by which the new loan exceeds the current principal balance of the existing loan; and (2) for an open-end loan, the amount by which the line of credit on the new loan exceeds the maximum credit limit of the existing loan. |
| The Banking Law of Connecticut / Conn. Gen. Stat. Ann. §36a-726(a) | Private Mortgage Insurance Disclosure | A mortgage lender who requires a borrower to pay for mortgage insurance as a condition of obtaining a first mortgage loan must disclose to the applicant in writing at the time the first mortgage application is filed: (1) that the purpose of mortgage insurance is to protect the mortgage lender against a loss which may be incurred in the event of default by the borrower under the mortgage loan; (2) that mortgage insurance is required as a condition of obtaining the mortgage loan, and under what, if any, conditions the lender may release the borrower from this obligation; (3) a good faith estimate of the initial cost, if any, and the monthly cost, if any, of the required mortgage insurance. Notwithstanding the foregoing, if the first mortgage transaction is subject to the requirements of the federal Truth in Lending Act (or Real Estate Settlement Procedures Act, as applicable), the mortgage lender may, in place of the disclosure required above, disclose that the cost of mortgage insurance will be disclosed on the Loan Estimate (or Good Faith Estimate, as applicable) and closing costs required to be furnished to the applicant in accordance with RESPA and TILA. |
| The Banking Law of Connecticut / Conn. Gen. Stat. Ann. §36a-706 | Refund of Fees | If a first mortgage loan has not been closed, and the application has not been rejected in accordance with the mortgage lender's standards of creditworthiness, 90 days after the filing of an application for a first mortgage loan with an initial loan-to-value ratio of 80% or less, whether or not there has been a mortgage rate lock-in, the applicant will be entitled to a full refund of all funds paid to the mortgage lender. This time period becomes 120 days if the first mortgage loan has a loan-to-value ratio of more than 80% or is to be insured or guaranteed by any agency of the federal government, any state or municipal government, or any quasi-governmental agency. In order to obtain a refund, the applicant must submit a written request within 30 days after the 90- or 120-day period, as applicable. See citation below for information regarding restrictions on the refunding of fees. |
| Connecticut Senate Bill 395 (2018) | Reverse Mortgage Counseling Notice |
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| Connecticut Senate Bill 395 (2018) | Reverse Mortgage Certifications |
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| Mortgages and Liens / Conn. Gen. Stat. Ann. §49-31b(b) | Variable-Rate Mortgages | Variable-rate mortgages are permitted but require that the “maximum term” be disclosed. The “maximum term” is disclosed if the mortgage deed states: (1) the interest rate is subject to variation; (2) the conditions under which the rate will vary; (3) the manner, including changes in payment amounts, number of scheduled payments, or change due at maturity, in which any increase and decrease in the rate be effected; and (4) the date, if applicable, by which according to the terms of the note, remaining amounts of principal and interest, if any, will be due and payable in full, regardless of changes in the interest rate. |