OLR Bill Analysis

sHB 5123

AN ACT CONCERNING PAYMENT OF SECONDARY MORTGAGE LOAN PROCEEDS BY WIRE TRANSFER

SUMMARY:

This bill extends to secondary mortgage lenders sending loan proceeds by wire transfer a provision requiring lenders including first mortgage lenders, to transfer those proceeds to the bank holding the mortgagee's attorney's account in a timely manner, but no later than the scheduled date and time of the mortgage closing. For a mortgage refinancing where the three-day right-of-rescission period has ended, the law requires the transfer to be made in a timely manner, but no later than the disbursement date. The bill limits the wire transfer provision's applicability to second mortgage loans for financing the mortgagee's purchase or initial construction of his principal dwelling.

The bill authorizes the banking commissioner to suspend, revoke, or refuse to renew secondary mortgage lenders' licenses, as he already can for first mortgage lenders, if they fail to comply with the wire transfer requirements.

EFFECTIVE DATE: October 1, 2003

COMMITTEE ACTION

Banks Committee

Joint Favorable Substitute