- Connecticut has pending legislation that strictly regulates “foreclosure rescue transactions” and “foreclosure rescue related activity”
- The State would:
- Prohibit people from advertising, offering, arranging, soliciting, promoting, promising, or carrying out foreclosure rescue transactions for profit; Where allowed, disclosure and notice are required; Prohibits the acceptance of advance fees for foreclosure-related services, except in certain cases for licensed attorneys, licensed mortgage brokers and lenders, and other financial institutions. When permitted advance fees are accepted, the bill subjects entities to disclosure regulations.
- Requires mortgage brokers and lenders to comply with all rules and regulations governing the marketing of mortgage loans.
- Allows the banking commissioner to adopt regulations to implement these prohibitions.
- Regulates transactions involving people with legal or equitable interest in residential property (homeowners) that reside in buildings with one to six units (residential property).
- Provides that violations of the statute are unfair trade practices and subject to the appropriate civil proceedings under the Connecticut Unfair Trade Practices Act (CUTPA).
- Licensed attorneys accepting retainer or advance fees related to foreclosure.
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