Connecticut Senate Bill SB00920

Connecticut 2015 Regular Session

• Introduced: 2/18/15
• Refer: 2/18/15

Caption

An Act Concerning Mortgage Correspondent Lenders.

Impact

By altering the licensing structure for mortgage correspondent lenders, SB00920 impacts the broader framework of banking and mortgage servicing laws in Connecticut. It facilitates quicker processing and less regulatory burden for specific entities in the mortgage market. Consequently, this could potentially enhance competition and lead to more efficient services for consumers seeking mortgages. However, the bill also raises concerns about regulatory oversight, as fewer licensing requirements may lead to an environment with less transparency and accountability in mortgage transactions.

Summary

SB00920, also known as 'An Act Concerning Mortgage Correspondent Lenders,' proposes significant amendments to the existing mortgage servicer licensing requirements in Connecticut. This legislation aims to allow certain mortgage correspondent lenders to operate without undergoing the same licensing scrutiny as traditional mortgage servicers. Specifically, it introduces changes that will exempt mortgage correspondent lenders from the licensing and bonding obligations that generally apply to mortgage servicers when dealing with residential mortgage loans during a specific holding period. These changes are intended to streamline operations within the mortgage industry and provide more flexibility for lenders.

Contention

Notably, the bill has sparked debates regarding the balance between facilitating business operations and ensuring consumer protection. Advocates of SB00920 argue that it reduces unnecessary hurdles for mortgage correspondent lenders, encouraging a more dynamic mortgage market. Conversely, critics express concerns that such deregulation may expose consumers to increased risks, particularly if those lenders are not held to the same stringent standards as traditional mortgage servicers. The discussions emphasize the tension between promoting economic activity and safeguarding consumer interests, signaling a critical point of contention among stakeholders.