Rep. William Tong (left) and Rep. Larry Butler (right) listen as Gov. Dannel P. Malloy presents his legislative proposal for helping distressed homeowners at a press conference in Hartford.
Banks Committee Chairman William Tong (D-Stamford, New Canaan) welcomed Governor Dannel P. Malloy’s proposed legislation Wednesday that is designed to protect homeowners facing mortgage delinquency or who are in foreclosure. The proposal also would streamline the process for addressing abandoned and blighted properties.
“Despite the improvement in the economy, regrettably many homeowners are still finding themselves in difficult financial situations,” Rep. Tong said. “We must continue to look for new ways to help them and make sure they are treated fairly.”
“This legislation will build on ongoing efforts to assist distressed homeowners,” Governor Malloy said at a news conference on the proposal. “This bill takes another step by offering protections to homeowners engaged in the mediation process.”
Governor Malloy said his legislative proposal would 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.
Rep. Tong led passage of legislation last year that makes it easier for people to qualify for the Connecticut Housing Finance Authority’s Emergency Mortgage Assistance Program (EMAP). The program allows for EMAP recipients to file defenses, counterclaims or set-offs against foreclosure on the assisted mortgage and specifies that the calculation of the maximum 60 months of EMAP payments begins with the first payment.
The legislative proposal also would 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.