Connecticut House Bill HB05352

Connecticut 2014 Regular Session

• Introduced: 2/26/14
• Refer: 2/26/14

Caption

An Act Concerning Mortgage Servicers.

Impact

The proposed legislation outlines a robust framework for the licensing and conduct of mortgage servicers, enhancing accountability and oversight within the industry. The Banking Commissioner is granted authority to investigate and conduct examinations to ensure compliance with these regulations. Additionally, non-compliance can result in penalties, damages, and attorneys' fees being awarded to affected mortgagors, thereby fostering a consumer-protective environment around mortgage servicing practices.

Summary

House Bill 05352, titled 'An Act Concerning Mortgage Servicers', aims to regulate mortgage servicers in the state of Connecticut. The bill introduces new requirements for mortgage servicers, including the necessity to maintain proper escrow accounts for taxes and insurance premiums. It mandates that mortgage servicers must pay the appropriate amounts to taxing authorities and insurance companies when due, provided they have received timely notifications and funds from the mortgagor. If funds in the escrow account are insufficient, the servicer must cover the shortfall and offer a payment plan to the mortgagor without interest for a specified period.

Contention

However, the bill does not go without contention. Critics might argue that the new regulations could impose excessive compliance costs on mortgage servicers, potentially leading to higher fees for consumers. Supporters, however, assert that these measures are essential to protect mortgagors from abusive practices, ensuring that their financial interests are safeguarded against negligence or fraud by mortgage servicers. This significant regulatory change could reshape how mortgage servicing operates within the state.