SB 810 — AN ACT PROHIBITING CERTAIN MORTGAGE LENDERS FROM CHARGING FEES TO BORROWERS AFTER RECEIVING A PAYMENT TO REINSTATE THE MORTGAGE.

General Assembly SubstituteRaised Bill No.

810 January Session, 2019 ANLCO ACTNo. PROHIBITING CERTAIN MORTGAGE LENDERS FROM CHARGING FEES TO BORROWERS AFTER RECEIVING A PAYMENT TO REINSTATE THE MORTGAGE.

3808 Referred to Committee on BANKING Introduced by:

(BA) AN ACT CONCERNING THE DEPARTMENT OF BANKING.

Section 49-10a36a-1 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2019):

(a)This Atitle mortgageeshall shall,be uponknown writtenas requestthe "Banking Law of theConnecticut" mortgagorand orshall thebe mortgagor'sapplicable attorneyto orall otherConnecticut authorizedbanks, agentConnecticut providecredit aunions, payoffmortgage statementlenders, ormortgage reinstatementcorrespondent paymentlenders, statementmortgage inbrokers, writingmortgage toloan theoriginators, personloan requestingprocessors theor payoffunderwriters, statementmoney ortransmitters, reinstatementcheck paymentcashers, statementtrustees onunder mortgages or beforedeeds theof datetrust specifiedof inreal suchproperty request,securing providedcertain suchinvestments, requestcorporations dateexercising isfiduciary atpowers, leastsmall sevenloan lenders, business daysand afterindustrial development corporations, sales finance companies, mortgage servicers, debt adjusters, debt negotiators, consumer collection agencies, student loan servicers, mortgage lead generators and to such other persons [as] who subject themselves to the dateprovisions of receiptthis title or who, by violating any of its provisions, become subject to the writtenpenalties request.provided in this title.

IfLCO theNo. request is made in connection with a default, the mortgagor's attorney may make such written request directly to the mortgagee, provided such written request contains a representation that the person requesting the payoff statement or reinstatement payment statement is the mortgagor's attorney and that the mortgagor has authorized the request.

(b)3808 If1 the mortgagee fails to provide the payoff statement or reinstatement payment statement on or before such request date, the mortgagee shall not be entitled to the payment of any2 interestRaised on the mortgage loan which is secured by such mortgage which accrues after LCO \\PRDFS1\SCOUSERS\FORZANOF\WS\2019SB-00810-R01 of 3 SB.docx Substitute Bill No.

810 theThis expirationact ofshall suchtake requesteffect date.as follows and shall amend the following sections:

IfOctober the1, mortgagee2019 providesSection the1 payoff36a-1 statementStatement or reinstatement payment statement to the person requesting such statement after the expiration of suchPurpose: request date, interest on the mortgage loan which accrues after the receipt of the payoff statement or the reinstatement payment statement by the person who has requested it shall again be payable.

TheTo burdenclarify ofthat proof shall be on the mortgagorDepartment with respect to the receipt by the mortgagee of theBanking mortgagor'shas requestauthority forover abusiness payoff statement or a reinstatement payment statement of the mortgage loan, and thereafterindustrial shalldevelopment becorporations. on the mortgagee with respect to the receipt of the payoff statement or reinstatement payment statement by the mortgagor or the mortgagor's attorney or other authorized agent.

(c)[Proposed Thedeletions mortgageeare shallenclosed notin imposebrackets. any fee or charge for the first payoff statement or reinstatement payment statement requested within a calendar year, unless the mortgagor or the mortgagor's attorney or other authorized agent requests expedited delivery of such statement, agrees to pay a fee for such expedited delivery and the statement is provided by the agreed upon date.

(d)Proposed Aadditions mortgageare issuedindicated by aunderline, Connecticutnot bankunderlined.] orthe aentire Connecticuttext creditof uniona onbill or afterresolution Octoberor 1,a 2019,section shallof be reinstated on the date the mortgagor pays to the mortgagee the total amount due on a reinstatementbill paymentor statement,resolution providedis suchnew, paymentit is madeLCO onNo. or before the date such statement expires.

The3808 mortgagee2 shallof not2 charge the mortgagor for any costs, expenses or attorneys' fees incurred by the mortgagee in connection with the mortgagor's default that were not included on the reinstatement payment statement and any such costs, expenses or attorneys' fees shall be waived by the mortgagee.

[(d)] (e) For the purposes of this section, "reinstatement payment statement" means a statement setting forth the total sum owed by a mortgagor to a mortgagee, which, if paid, will cause the loan to be reinstated, provided any other contractual conditions for reinstatement are satisfied.

LCO {\\PRDFS1\SCOUSERS\FORZANOF\WS\2019SB-00812 of 3 R01-SB.docx } Substitute Bill No.

810 [(e)] (f) Nothing in this section shall create an obligation on the part of the mortgagee to provide a reinstatement payment statement if a right to cure the payment default and reinstate the mortgage loan does not exist under the mortgage loan documents or at law.

This act shall take effect as follows and shall amend the following sections:

Section 1 October 1, 2019 49-10a BA Joint Favorable Subst.

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