Home Loan Mortgagers :: Mortgage Lenders Connecticut
Mortgage Lenders Connecticut: The Laws Governing Mortgage Lenders in Connecticut
When it comes to policy surrounding mortgage lenders, Connecticut and its Department of Banking has a number of Banking and Related Laws that are designed to protect the consumer. The Department's Consumer and Credit Division licenses and regulates all the state's collection agencies, pay-day loan companies, money order services, small loan firms, debt adjusters and mortgage lenders.
Connecticut and its homeowners are well protected. Keep reading to learn about some of the more pertinent Connecticut banking laws that will affect you and your mortgage purchase.
No Fees for Unsecured Loans (Chapter 668, Part VI – Loan Brokers)
This law prohibits brokers of any unsecured loans, so smaller loans that aren't secured by the equity of your home, from collecting an advance fee before the loan money is disbursed or given to you. Basically, if a mortgage broker offers to find you a separate unsecured loan to meet your down payment requirements, but asks for a fee up front, that's illegal.
Locked-In Rate Security (Chapter 669, Part VII – Mortgage Processing)
This law states that a mortgage lender must stick to the locked-in rate agreed upon in your written agreement if any closing delays were caused by the mortgage lenders. Connecticut is basically saying that if your mortgage lender delays your mortgage processing until after interest rates have gone up, they must honor the original, agreed-upon rate.
No Title Insurance (Chapter 669, Part X – Other Mortgage Practices)
This law says that requiring owner's title insurance is a prohibited requirement for mortgage lenders. Connecticut Department of Banking is basically saying that a mortgage lender can't demand that you obtain owner's title insurance.
Registered Payments Only (Chapter 669, Part X – Other Mortgage Practices)
Essentially, this law states that any payments of loan proceeds or closing costs to either attorneys or the lender must be paid by treasurer's, certified or cashier's check or through a wire transfer. The government wants to protect you from handing over cash to less-than-reputable or unregistered mortgage lenders. Connecticut authorities are able to track down registered payments, but not those made by personal check or cash.
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