If you recall, Gov. Malloy proposed a bill to streamline the foreclosure process in January 2013. Originally, its objective was to lessen the delay and amount of paperwork homeowners face when entering the foreclosure mediation process, reduce potential lawsuits, and ensure foreclosing abandoned properties is easier and quicker. Banks not following would be faced with a fine, or the foreclosure action would be dropped.
Since that point, the bill passed in the Connecticut House of Representatives by a 135-0 vote and was then moved onto the Connecticut Senate. As of August 13, Gov. Malloy and Banks Committee members signed the measure into law at the Housing Development Fund location in Stamford.
Regarding the new law, called Public Act 13-136, Gov. Malloy told the press: “Ensuring a fair and expedient process for everyone in a foreclosure process is an important step towards protecting people and neighborhoods across Connecticut. Everyone involved benefits when the properties remain occupied and families have access to stable housing.”
The law now provides guidelines for conducting foreclosure-related mediation between lenders and homeowners, with the goal of both parties acting in “good faith and without delay.” According to Stratford Patch, these points include:
- Lenders are required to give borrowers a full and comprehensive account history for a mortgage, and be familiar with the borrower’s files and past mediation sessions.
- The borrower is required to put together and provide in mediation sessions full financial documentation.
- The “Objectives of the Mediation Program” involves both parties coming to an agreement regarding modification or, if one can’t be worked out, streamlining the foreclosure process in line with the borrower’s and lender’s needs.
Public Act 13-136 is the latest change to housing measures in the state. Back in June, Public Act 13-65 increased the amount available for uninsured CHFA mortgages.
The news comes at the same time foreclosure activity in Connecticut drastically increased. According to the Hartford Business Journal, year-to-year figures for foreclosures in the state went up 33 percent in July, making Connecticut have the fourth-highest activity in the U.S.