Connecticut House Bill HB06370

Connecticut 2021 Regular Session

• Introduced: 2/3/21
• Refer: 2/3/21

Caption

An Act Prohibiting Certain Mortgage Lenders From Charging Fees To Borrowers After Receiving A Payment To Reinstate The Mortgage.

Impact

If enacted, HB 06370 is expected to impact the operations of mortgage lenders in Connecticut by imposing stricter guidelines on how they handle reinstatement payments. By requiring lenders to provide clear and transparent reinstatement payment statements, the bill helps protect consumers from unexpected fees that can emerge during the reinstatement process. This may also encourage more responsible lending practices by ensuring that borrowers are informed of their financial obligations upfront, thus preventing potential conflicts and disputes related to mortgage reinstatements.

Summary

House Bill 06370 is a legislative proposal aimed at prohibiting certain mortgage lenders, specifically Connecticut banks and credit unions, from charging fees to borrowers after they have made a payment to reinstate their mortgage. The bill seeks to create fairer conditions for borrowers by ensuring that they are not subject to additional financial burdens after they have taken steps to address defaults in their mortgage payments. The act mandates that if a borrower provides payment to reinstate the mortgage, any associated costs or attorney fees incurred by the lender, which were not previously disclosed, must be waived.

Contention

While the legislation is primarily viewed as a consumer protection measure, it could face pushback from some mortgage lenders who may argue that it limits their ability to recover costs associated with handling borrower defaults. The concern lies in how this bill could potentially affect lenders' operational practices and their financial viability in managing risk. Proponents of the bill emphasize the importance of protecting consumers from excessive and unanticipated costs during a vulnerable period, arguing that this legislation will create a more equitable mortgage lending environment.