Connecticut Gov. M. Jodi Rell has signed SB 949, "An Act Concerning Mortgage Practices." The bill, among other things, establishes residential mortgage fraud as a criminal offense in Connecticut. The bill also amends the definition of "non-prime home loans" and prohibits or restricts a lender from offering non-prime home loans with certain terms and conditions (i.e., negative amortization, default rate increases, excessive late fees and acceleration clauses).
Under SB 949, a high-cost home loan cannot provide for an increase in the interest rate after default or provide for default charges in excess of five percent of the amount in default. The bill becomes effective Oct. 1, 2009.
For a copy of SB 949, click here.