Governor M. Jodi Rell today urged the Legislature to take quick action on two bills that would help more Connecticut families avoid foreclosure.
"So many homeowners are facing tremendous financial pressure in this economy, struggling month by month just to make ends meet," Governor Rell said. "The sooner we can get these bills into law the sooner borrowers can take advantage of the extended programs and protections designed to keep them in their homes."
House Bill 6378, An Act Concerning Relief for Families Facing Foreclosure, and Senate Bill 619, An Act Concerning Foreclosure Procedures, expand and improve existing assistance programs created in response to the subprime mortgage crisis. The national recession and rising unemployment have now put even more Connecticut families at risk of foreclosure, Governor Rell said, leading her to propose modifications in the existing programs to expand eligibility.
"The original programs are good - but they did not serve as many people as we intended," the Governor said. "These changes will streamline the application process, making it easier for more homeowners to get the help they need."
Foreclosure filings in Connecticut have risen nearly 75 percent over the past year. According to the Connecticut Housing Finance Authority, 6,096 homeowners received foreclosure notices in the first three months of 2009, compared with 3,490 for the same period last year.
HB 6378, now before the state House of Representatives, expands eligibility in two key mortgage assistance programs:
· Emergency Mortgage Assistance Program (EMAP) helps homeowners pay portion of their mortgage for up to five years. Governor Rell's proposal would modify rigid eligibility and qualifying standards.
· Connecticut Fair Alternative Mortgage Lending Initiative and Education Services (CT FAMLIES) offers 30-year, fixed-rate mortgage refinancing through CHFA to low- and moderate-income borrowers with variable rate mortgages. The Governor's proposal would allow borrowers with fixed-rate mortgages to participate.
Senate Bill 619, now before the state Senate, makes mediation mandatory in all real estate foreclosures. The proposal builds on changes that Governor Rell and the Co-Chairs of the Legislature's Banks Committee - Senator Bob Duff and Representative Ryan Barry - developed last year.
The initial law expanded mediation services offered through the Judicial Branch. Since then more than a quarter of foreclosure proceedings have gone to mediation, with about 70 percent of those cases being resolved amicably - meaning the borrower was not forced to leave the home and the lender was not forced to take over the property.
"Because we are in unprecedented economic times, everything we can do to help Connecticut families weather this storm must be underscored with urgency," Governor Rell said. "I am hopeful lawmakers will approve this much-needed legislation as swiftly as possible and I appreciate their attention to this matter."