2012 Connecticut General Statutes
Title 36a - The Banking Law of Connecticut
Chapter 669 - Regulated Activities
Section 36a-760g - Restrictions on making and financing under nonprime home loans. Curing of defaults.

(a) As used in this section and section 36a-760h, the term “mortgage” means a mortgage deed or other instrument that constitutes a first or secondary consensual lien upon any interest in one-to-four family residential real property located in this state, that is, or when the loan is made, intended to be occupied by the borrower as a principal residence. “Mortgage” includes, but is not limited to, a nonprime home loan.

(b) A lender shall not make and a mortgage broker shall not offer a nonprime home loan that refinances a mortgage unless the nonprime home loan provides or is expected to provide a tangible net benefit to the borrower. A lender or mortgage broker shall not take any action that recommends or encourages a default on an existing mortgage or other debt prior to and in connection with the closing or planned closing of a new nonprime home loan that refinances all or any portion of the existing loan or debt.

(c) A lender may not finance, directly or indirectly in connection with a mortgage, any credit life, credit disability, credit unemployment or credit property insurance, or any other life or health insurance or any payments directly or indirectly for any debt cancellation or suspension agreement or contract, except that insurance premiums or debt cancellation or suspension fees calculated and paid on a monthly basis or through regularly scheduled periodic payments shall not be considered financed by the lender for the purposes of this subsection.

(d) If all defaults in connection with a nonprime home loan are cured after the initiation of any action to foreclose, but prior to the entry of judgment, the lender shall take steps as necessary to terminate the foreclosure proceeding or other action. The lender may require that the borrower pay any reasonable costs actually incurred by the lender in connection with the default and protecting its rights in the property, including any costs related to collection, foreclosure and termination of the proceeding or other action. Cure of default reinstates the borrower to the same position as if the default had not occurred and nullifies, as of the date of the cure, any acceleration of any obligation under the security instrument or note arising from the default. The borrower’s right to reinstatement, as described in this subsection, may not be exercised by the borrower on more than two occasions over the course of twenty-four consecutive months.

(P.A. 08-176, S. 28.)

History: P.A. 08-176 effective July 1, 2008.