(Formerly Sec. 36-442bb). Disclosure required

(a) Any mortgage lender who requires a borrower to pay for mortgage insurance as a condition of obtaining a first mortgage loan shall disclose to the applicant in writing at the time the first mortgage loan application is filed: (1) That the purpose of mortgage insurance is to protect the mortgage lender against a loss which may be incurred in the event of a default by the borrower under the mortgage loan; (2) That mortgage insurance is required as a condition of obtaining the mortgage loan, and under what, if any, conditions the lender may release the borrower from this obligation; (3) A good faith estimate of the initial cost, if any, and the monthly cost, if any, of the required mortgage insurance. Notwithstanding the foregoing, if the first mortgage loan transaction is subject to the requirements of the federal Real Estate Settlement Procedures Act, the mortgage lender may, in place of the disclosure required under this subdivision, disclose that the cost of mortgage insurance will be disclosed on the good faith estimate of closing costs required to be furnished to the applicant in accordance with the Real Estate Settlement Procedures Act and the Truth-in-Lending Act, 15 USC Section 1601 et seq., as amended from time to time, and the regulations promulgated thereunder. (b) Any mortgage lender who does not require mortgage insurance but does charge a higher interest rate for first mortgage loans in excess of an eighty per cent loan-to-value ratio shall disclose this fact to the applicant in writing at the time the first mortgage loan application is filed. (c) The provisions of subsection (a) of this section shall not apply to any first mortgage loan which is to be insured or guaranteed by any agency of the federal government or any state or municipal government or quasi-governmental agency where such agency requires that mortgage insurance be obtained in connection with the loan.