An Act Concerning The Payment Of First Or Secondary Mortgage Loan Proceeds By Wire Transfer.
Impact
The passage of SB00130 is significant as it directly affects entities engaged in the residential mortgage lending business in Connecticut. Specifically, it applies to both first and secondary mortgage loans intended for financing a principal dwelling's acquisition or construction. Non-compliance with this statute could lead to license suspensions or revocations, emphasizing the state's regulatory role in mortgage transactions and the importance of timely fund management in maintaining transactional integrity.
Summary
SB00130, titled 'An Act Concerning The Payment Of First Or Secondary Mortgage Loan Proceeds By Wire Transfer', was introduced with the intent to streamline the payment process involved in mortgage closing transactions. The bill mandates that any lender who opts to use a wire transfer for disbursing mortgage proceeds must complete the transfer to the attorney's bank by the time scheduled for closing. This aims to alleviate common issues such as delays in fund availability that can complicate the closing process, potentially leading to violations of ethical obligations concerning the handling of client funds.
Contention
While the bill's proponents argue that it addresses crucial issues in the closing process, concerns have been raised regarding its implications for operational flexibility among attorneys and lenders. Potential contention arises from the provisions that could penalize lenders for delays caused by factors outside their control. This could place undue burdens on smaller lending institutions or individual mortgage brokers who may struggle to meet strict compliance deadlines, leading to broader discussions about the balance between consumer protections and regulatory burdens within the mortgage financing industry.
An Act Concerning Consumer Credit, Certain Bank Real Estate Improvements, The Connecticut Uniform Securities Act, Shared Appreciation Agreements, Innovation Banks, The Community Bank And Community Credit Union Program And Technical Revisions To The Banking Statutes.