State Senator Bob Duff
June 2, 2009
Duff, Representative Barry: Bill Calls for Mandatory Mediation in Foreclosure Cases
Mortgage assistance program would also be expanded in final action on legislation
Legislation authored by state Senator Bob Duff (D-Norwalk) and Representative Ryan Barry (D-Manchester), co-chairs of the Legislature’s Banks Committee, requiring mediation between lenders and defendant borrowers in home foreclosure court cases received final approval by the General Assembly tonight. The bill — Senate Bill 948 — which passed the Senate for the second time tonight, now goes to Governor M. Jodi Rell to be signed into law.
“Our foreclosure mediation program has become a model for the rest of the country, and it’s helped keep 600 people in Connecticut in their homes since its creation last year,” said Senator Duff, “but only about a quarter of the homeowners eligible for the program are actually using it. The month of March set a new record — 5.3 percent of all home loans — for home foreclosures in Connecticut. This is a proven way to reduce home foreclosures, and it’s needed now more than ever.”
The legislation builds upon last year’s Banks Committee action that created a voluntary foreclosure mediation program widely acknowledged as successful in leading to sustained homeownership. About 70 percent of foreclosure court cases that do go to mediation are resolved successfully.
“Currently, less than 30 percent of those eligible for foreclosure meditation take advantage of it,” Representative Barry said. “We want it to be a mandatory part of a foreclosure case to see if a loan modification or repayment schedule can help keep people in their homes. We also expect this to help identify people who can benefit from existing refinancing programs.”
In addition, the legislation expands the reach of the state’s Emergency Mortgage Assistance Program (EMAP) by allowing the Connecticut Housing Finance Authority more flexibility in determining who qualifies for help.
Designed to help protect homeowners victimized by the national subprime mortgage crisis, Senator Duff and Representative Barry were able to add additional funding to EMAP last year.
The 2009 regular legislative session adjourns on Wednesday, June 3.
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