Senators McDonald, Kissel Seek to Improve Bank-Homeowner Relationship During Foreclosure
March 1, 2010 – (RealEstateRama) — State Senators Andrew J. McDonald (D-Stamford) and John Kissel (R-Enfield), the Senate Chairman and Ranking Member, respectively, of the Judiciary Committee, today unveiled a new legislative proposal designed to make banks and other financial institutions work more closely with homeowners during foreclosure proceedings.
Senate Bill 225, “An Act Concerning the Duties of a Mortgagee in a Foreclosure Action on Residential Real Property,” seeks to improve communication during foreclosure proceedings by requiring that a representative of the bank—rather than an attorney or a judge in a court of law—be available to work with a homeowner to seek alternatives to foreclosures in advance of a judgment.
According to a recent Hartford Courant news report, foreclosures and seriously delinquent home loans in Connecticut jumped more than a full percentage point in the last three months of 2009, with nearly one out of every 12 mortgages—42,012—in foreclosure or 90 days past due.
A public hearing on SB 225 is scheduled for this Wednesday, March 3, beginning at 11 a.m. in Room 2-C of the Legislative office Building in Hartford.
“It seems as though many national banks and financial institutions are closing, merging or re-organizing every month, shrinking their customer-service operations and ignoring the pleas of some mortgage holders,” Sen. McDonald said. “I believe that if a bank or financial institution cares enough to take your mortgage principal, penalties and interest, it should also care enough to help an embattled homeowner through this tough economy, and that means having a regular, reliable point of contact once foreclosing proceedings begin. This one, small change could make the difference between losing your home and working out an agreement to save your home.”
“Individuals who have fallen upon hard times and are forced into foreclosure should at the very least be able to talk to someone at their bank,” said Sen. Kissel. “Rules and regulations in regard to foreclosure proceedings are confusing and these folks should be given the benefit of talking with someone who can explain the procedure, their rights, and how to resolved the situation before they lose their home”
“We welcome the initiative shown by Senators McDonald and Kissel to address the existing limbo that so many families find themselves in during foreclosure proceedings,” said Joan Carty, President of the Housing Development Fund, a community development financial institution based in Stamford that provides counseling and financing to Connecticut families for rental, homeownership and foreclosure intervention. “By demanding that an authorized representative be swiftly established by the lender, this law should improve the opportunity to proceed with a modification or forbearance in those situations where it is a viable course of action. Every step taken to close the gaps in this process is greatly needed and very much appreciated.”
“The Connecticut Fair Housing Center strongly supports Senate Bill 225 because it addresses one of the primary roadblocks for homeowners in foreclosure negotiations: it requires that a lender or servicer employee be identified who has authority to negotiate a refinance agreement or a loan modification,” said Erin Kemple, Executive Director of the Connecticut Fair Housing Center. “Without the name of someone from the lender who has authority to negotiate to end the foreclosure, such cases will drag on and homeowners will believe that their most important asset is slipping through their fingers. If enacted, this bill will be an important tool in the fight to save the homes of more Connecticut families.”
Contact:
Larry Cook
860-240-8609
Lawrence.Cook (at) cga.ct (dot) gov
