General Assembly Takes Action in Special Session to Help Neighborhoods and Homeowners Affected by Foreclosures

Senator Williams: “These measures are another weapon in the fight against the foreclosure crisis in Connecticut.”

June 22, 2010 – (RealEstateRama) — Senate President Donald E. Williams, Jr. (D-Brooklyn) says action taken today in special session by the General Assembly will help neighborhoods and homeowners in Connecticut cope with the effects of the mortgage foreclosure crisis.

The legislation exempts properties facing foreclosure or ‘short sales’ from the real estate conveyance tax, and expands a state program that helps borrowers purchase foreclosed or abandoned properties. Both bills passed the Senate with strong bipartisan support.

“The effects of a foreclosure extend beyond the homeowner and can impact property values and public safety throughout the neighborhood,” said Senator Williams. “No part of Connecticut has been hit harder than Windham County and that needs to change. Our bipartisan jobs bill will make a difference and so will the legislation we passed today. These measures are another weapon in the fight against the foreclosure crisis in Connecticut.”

According to RealtyTrac, a California based company that tracks housing stats—Windham County has the highest percentage of foreclosures among Connecticut’s eight counties. Analysts at RealtyTrac report that Windham County has one foreclosure notice for every 555 homes.

Senate Bill 501 includes language that exempts foreclosed properties and ‘short sales’ from the real estate conveyance tax. The changes mean that homeowners facing foreclosure won’t face the additional challenge of paying the conveyance tax.

Senator Williams also supported passage of Senate Bill 502, which includes enhancements to the CT Families and the Homeowner’s Equity Recovery (HERO) loan program operated by the CT Housing Finance Authority (CHFA). The new law allows the CHFA to make mortgage loans to borrowers who purchase (1) foreclosed properties, (2) abandoned properties, or (3) properties conveyed by deed in lieu of foreclosure or short sale.

According to the Office of Legislative Research (OLR), “The CT FAMLIES program offers 30-year fixed-rate refinance loans to Connecticut homeowners who are delinquent on their fixed-rate or adjustable-rate mortgages. The program also provides second mortgage loans in conjunction with the refinance loan. The law allows CHFA to make up to $40 million in mortgages for these purposes . . . The bill also allows CHFA to make such mortgages through the HERO program, through which CHFA purchases mortgages directly from lenders and places eligible borrowers on an affordable repayment plan.”