Governor M. Jodi Rell and the co-Chairs of the Legislature’s Banks Committee – Senator Bob Duff and Representative Ryan P. Barry – today announced they have reached agreement on legislation that would make mediation a mandatory part of all real estate foreclosures in Connecticut, a move that could sharply reduce the number of borrowers losing their homes.
The new legislation builds on changes Governor Rell, Senator Duff and Representative Barry developed last year that expanded mediation services offered through the Judicial Branch. Under that change, more than a quarter of recent foreclosure proceedings have gone to mediation – and about 70 percent of those cases have been resolved amicably, without the borrower being forced to leave the home or the lender forced to take over the property.
Under the new legislation, mediation services would be required in all foreclosure cases. The service funded with money already assigned to the Connecticut Housing Finance Authority to help deal with the subprime mortgage crisis.
“We are doing everything in our power to help the Connecticut families struggling to cope with the roller-coaster real estate market,” Governor Rell said. “A part of the nation’s current economic misery can be traced back to the subprime mortgage industry. The national economy continues to be a drag on our state’s business climate and we must protect responsible homeowners, sensible lenders and real estate values.
“No one ‘wins’ when a foreclosure is completed – the borrower loses the home they have struggled to purchase, care for and preserve while the lender winds up with a property they neither want nor have the resources to truly manage,” the Governor said. “Neighbors see their own property values diminish and often end up watching the foreclosed home actually deteriorate as the weeks go by. If we can prevent these problems by finding reasonable, workable solutions, the entire state can benefit. I am grateful for the hard work by Senator Duff and Representative Barry on this project.”
Senator Duff (D-25), said, “The subprime mortgage mess has turned too many family financial problems into family tragedies. I appreciate the opportunity to continue the successful partnership the Governor, Representative Barry and I have forged, which has established a number of important programs to help Connecticut residents deal with the mortgage crisis and keep their most important investment.”
Representative Barry (D-12) added, “From the beginning we have worked to shape programs that will help as many Connecticut homeowners as possible – and Governor Rell, Senator Duff and I have always been willing to go back and improve them when we can. The foreclosure mediation program has a solid track record and we hope to extend that to more families.”
