Governor Dannel P. Malloy, joined by Lieutenant Governor Nancy Wyman, Attorney General George Jepsen, Commissioner of the Department of Banking Howard Pitkin, state officials, and housing advocates, today unveiled legislation designed to protect homeowners facing mortgage delinquency or who are in foreclosure, and streamline the process for addressing abandoned and blighted properties.
"This legislation will build on ongoing efforts to assist distressed homeowners," said Governor Malloy. "Attorney General Jepsen, Commissioner Pitkin and I continue to look for ways to help people who are facing foreclosure. Through the mortgage assistance events we've held across the state, we've been able to help connect thousands of homeowners with their lenders. This bill takes another step by offering protections to homeowners engaged in the mediation process, and ensuring that process is efficient and fair."
"Keeping people in their homes if at all possible makes for a stronger economy and stronger communities," said Lt. Governor Wyman. "With the housing market finally showing signs of sustained improvement, this legislation is another way we can build on that momentum."
The Governor's legislation will ensure better protections for homeowners facing delinquency or foreclosure by refining the mediation process and making it more efficient for borrowers and lenders. It will require that banks have a representative who has full settlement authority to be present in each mediation session. All parties must mediate in good faith or face sanctions, fines, or dismissal of the foreclosure. It will also ensure homeowners engaged in mediation will not simultaneously face foreclosure-related litigation.
The proposed bill will fast-track the process for addressing abandoned and blighted properties -- properties that cause the values of surrounding homes to decline and cost municipalities needed tax revenue. Under the legislation, in cases where a property is abandoned, the foreclosure process can be conducted in 56 days, down from the current 70 days.
Transparency is strengthened under the new bill with requirements that banks fully disclose the fees they charge and the information being used against the homeowner. In addition, the Department of Banking will be able to disclose information required of banks on the number of abandoned or vacant properties, the number of occupied properties, the number of delinquent loans, and data on the number of loans they own or service.
The legislation builds on a series of statewide mortgage assistance events sponsored by the Governor, the Attorney General, and the Department of Banking that directly connect lenders to struggling homeowners.
"There is no question that the mortgage crisis is continuing to cause significant distress to families across Connecticut and throughout the country," said Attorney General George Jepsen. "Our goal, with the judicial mediation process and efforts such as this bill is to help people stay in their homes as long as possible. Homeowners, mortgage holders and neighborhoods all benefit when properties remain occupied and are not abandoned because of foreclosure."
"I am very proud to be part of this event this morning," said Commissioner Pitkin. "The mortgage assistance events have been attended by over 4,200 people. While that is a great turnout, it shows the need to do more. With this legislation, I am hopeful we will be able to further reduce the number of foreclosures in Connecticut."
The bill will be part of the Governor's legislative package that will be unveiled on February 6.