CHAPTER 669
REGULATED ACTIVITIES
PART VIII
MORTGAGE INSURANCE
Connecticut General Statutes, as amended by Public Act 10-32
Sec. 36a-725. (Formerly Sec. 36-442aa). Definitions. As used in this section and section 36a-726, unless the context otherwise requires:
(1) “First mortgage loan” means any loan made to an individual, the proceeds of which are to be used primarily for personal, family or household purposes, which loan is secured by a mortgage upon any interest in one-to-four-family residential, owner-occupied real property located in this state which is not subject to any prior mortgages. The term includes the renewal or refinancing of an existing first mortgage loan;
(2) “Mortgage insurance” means insurance written by an independent mortgage insurance company to protect the mortgage lender against loss incurred in the event of a default by a borrower under the mortgage loan;
(3) “Mortgage lender” means any person engaged in the business of making first mortgage loans, including, but not limited to, banks, out-of-state banks, Connecticut credit unions, federal credit unions, out-of-state credit unions, and mortgage lenders and mortgage correspondent lenders required to be licensed under sections 36a-485 to 36a-498a, inclusive.
(P.A. 89-95, S. 1; P.A. 92-12, S. 91; P.A. 94-122, S. 314, 340; P.A. 04-69, S. 27; P.A. 08-176, S. 61; P.A. 10-32, S. 113.)
History: P.A. 92-12 redesignated Subdivs. and made technical changes; P.A. 94-122 deleted the definition of “person”, reordered definitions and made other technical changes, effective January 1, 1995; Sec. 36-442aa transferred to Sec. 36a-725 in 1995; P.A. 04-69 amended Subdiv. (3) to substitute “36a-498a” for “36a-498”; P.A. 08-176 added reference to correspondent mortgage lender and made a conforming change in Subdiv. (3), effective July 1, 2008.
Sec. 36a-726. (Formerly Sec. 36-442bb). Disclosure required. (a) Any mortgage lender who requires a borrower to pay for mortgage insurance as a condition of obtaining a first mortgage loan shall disclose to the applicant in writing at the time the first mortgage loan application is filed:
(1) That the purpose of mortgage insurance is to protect the mortgage lender against a loss which may be incurred in the event of a default by the borrower under the mortgage loan;
(2) That mortgage insurance is required as a condition of obtaining the mortgage loan, and under what, if any, conditions the lender may release the borrower from this obligation;
(3) A good faith estimate of the initial cost, if any, and the monthly cost, if any, of the required mortgage insurance. Notwithstanding the foregoing, if the first mortgage loan transaction is subject to the requirements of the federal Real Estate Settlement Procedures Act, the mortgage lender may, in place of the disclosure required under this subdivision, disclose that the cost of mortgage insurance will be disclosed on the good faith estimate of closing costs required to be furnished to the applicant in accordance with the Real Estate Settlement Procedures Act.
(b) Any mortgage lender who does not require mortgage insurance but does charge a higher interest rate for first mortgage loans in excess of an eighty per cent loan-to-value ratio shall disclose this fact to the applicant in writing at the time the first mortgage loan application is filed.
(c) The provisions of subsection (a) of this section shall not apply to any first mortgage loan which is to be insured or guaranteed by any agency of the federal government or any state or municipal government or quasi-governmental agency where such agency requires that mortgage insurance be obtained in connection with the loan.
(P.A. 89-95, S. 2.)
History: Sec. 36-442bb transferred to Sec. 36a-726 in 1995.
Secs. 36a-727 to 36a-734. Reserved for future use.
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