Connecticut Senate Bill SB00398

Connecticut 2014 Regular Session

• Introduced: 3/5/14
• Refer: 3/5/14

Caption

An Act Concerning Home Loans.

Impact

If enacted, SB00398 will adjust regulations surrounding lenders and brokers in Connecticut by detailing the circumstances under which a loan is categorized as a nonprime home loan. The bill empowers the commissioner to set limits on the APRs based on the economic landscape, factoring in changes in market conditions to ensure that loans remain accessible and fair for consumers. Furthermore, it includes provisions that prevent lenders from imposing unreasonable fees or rates, potentially stabilizing the mortgage loan market in Connecticut. This could lead to greater protection for consumers in predatory lending situations.

Summary

SB00398, titled 'An Act Concerning Home Loans,' seeks to amend existing laws regarding home loans and to offer clearer definitions and regulations for various types of mortgage loans. This bill specifically addresses nonprime home loans, classified as loans exceeding certain thresholds that present higher risks to borrowers. It defines key terms related to home financing, including 'APR' (Annual Percentage Rate), 'lender,' and 'mortgage broker,' creating a more structured framework for how these terms are used within Connecticut's lending landscape. By codifying these terms, the bill aims to clarify the obligations and rights of both lenders and borrowers.

Contention

Despite its supportive intent, there may be points of contention surrounding SB00398, particularly from lenders who may feel constrained by the regulations set forth in the bill. Some stakeholders might argue that these regulations increase the compliance burden on mortgage professionals and could inadvertently tighten lending conditions, particularly for borrowers who might otherwise qualify under more lenient underwriting standards. The discourse about balancing consumer protection with market flexibility is expected to be a significant aspect of the discussions as the bill moves forward.