A law that makes Connecticut's second-lien mortgage regulations consistent with its first-lien regulations went into effect on Oct. 1.The law takes the definition of prepaid finance charges from the state's predatory lending legislation and applies it to secondary mortgage lenders as well as first-lien lenders. Odd-days' interest, interim interest, and fees paid to governmental agencies (such as those on FHA loans) are no longer included in the definition. Commissions payable to a lender or broker in connection with the sale of credit life, accident, health, disability, or unemployment insurance, are now defined as prepaid finance charges for the first time. The limit for such charges on second-lien loans is 8%.
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