General Assembly	Proposed Bill No. 5080
January Session, 2003	LCO No. 333
Referred to Committee on Banks
Introduced by:
REP. STRIPP, 135th Dist.

AN ACT CONCERNING DISCLOSURES BY MORTGAGE SERVICING COMPANIES.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

That part VII of chapter 669 of the general statutes be amended to (1) require that, at least twenty-four hours before the closing of a first mortgage loan, as defined in section 36a-705 of the general statutes, on residential property located in this state, the mortgage lender, as defined in said section 36a-705, shall notify the mortgagor of the name and mailing address of the mortgage servicing company, as defined in section 36a-715 of the general statutes, if any, that will receive payments of interest and principal in connection with the mortgage, (2) require that, if the mortgage servicing company that receives payments of interest and principal in connection with any first mortgage loan changes, (A) the mortgage servicing company that will assume responsibility for servicing the first mortgage loan shall notify the mortgagor at least sixty days prior to assuming responsibility for servicing the mortgagor's loan of such company's name and mailing address, and shall provide all information required to be provided to a mortgagor pursuant to subdivision (3) of this section, (B) said mortgage servicing company, at least thirty days prior to assuming responsibility for servicing the mortgagor's loan, shall notify the Commissioner of Banking, in electronic format, as specified by the commissioner, and (C) if any such mortgage servicing company fails to provide notice to either the mortgagor, the commissioner, or both, such mortgage servicing company shall be prohibited, for twelve months from the date that such company assumes responsibility for servicing such mortgage, from charging the mortgagor any fees other than the principal and interest payments and any late fees as specified in the original mortgage document, (3) require that each mortgage servicing company that receives payments of interest and principal in connection with a first mortgage loan on residential property located in this state shall provide to the mortgagor (A) a schedule of fees that may be imposed upon the mortgagor by the company, (B) notice of any inspections to be performed by or for the benefit of the company which will be charged to the mortgagor, (C) the circumstances in which the mortgagor may be responsible for payment of attorney's fees for services provided to the company and a schedule of such fees, (D) any company requirements concerning insurance to be carried by the mortgagor, and any company policy that permits the company to obtain such insurance for the mortgagor and charge the mortgagor for said insurance if the mortgagor is unable to obtain such insurance, (E) a street address to which the mortgagor may send correspondence, (F) a local or toll-free phone number that the mortgagor may call with questions or complaints, (G) the real estate brokerage fees which may be realized by the company in the event of foreclosure, and (H) notification of any change in information previously provided pursuant to subparagraphs (A) to (G), inclusive, of this subdivision, and (4) authorize the Commissioner of Banking to refer to the Chief State's Attorney any mortgage servicing company that, in the commissioner's opinion, has systematically and flagrantly violated the provisions of subdivision (2) or (3) of this section, for prosecution pursuant to chapter 949c of the general statutes; and that section 53-394 of the general statutes be amended by adding to the definition of "racketeering activity" the systematic and flagrant violation of subdivision (2) or (3) of this section.

Statement of Purpose:

To provide information to consumers about fees and procedures of mortgage servicing companies.