Connecticut Is Widening Its Measures to Help Foreclosure Victims

Connecticut is widening its measures to help the hapless foreclosure victims by expanding the Emergency Mortgage Assistance Program that had been initiated the previous year. It had been successful in helping 15,000 homeowners in the state from the jaws of foreclosure.

The legislators are now keen that the foreclosure victims be able to avail of assistance earlier than heretofore – as soon as their mortgages fall behind 60 days in payment and not by having to wait to receive notifications of foreclosure from the lenders. These proposals were the topics of a public hearing last Tuesday24th February 2009, in front of the Banks Committee.

The foreclosure drama has taken a new turn. According to the head of Connecticut Housing Finance Authority many borrowers with traditional mortgages have now lost their jobs. This is causing them to be threatened with foreclosure. It is no longer only borrowers with sub-prime or Adjustable Rate Mortgages who are facing the threat of the foreclosure bite.

The co-chairperson of the committee, Senator Bob Duff (Democrat – Norwalk) commented that he was dissatisfied that the Governor M. Jodi Rell recent proposal about remedying budget deficit by slicing away $11 million from the Emergency Mortgage Assistance Program (EMAP). He added that the committee would proceed with the revisions and wait for the promised federal grant that should come in within the forthcoming months. Duff, speaking at an interview, said that the legislators wanted to be more severe with penalties that would be imposed on those who preyed on the distress of foreclosure victims.

Committee member Rep. William A. Hamzy opined that he wanted to make sure that the aid coming through would be given to those single-family house owners who had purchased their houses keeping in view their income and not to speculators and investors. In the hearing on the legislation that continued for a whole day, it was suggested that the EMAP plans would be expanded upon and laws against predatory lenders would be strengthened. The Deputy banking Commissioner said that his department was in favour of making fraudulent operations in residential mortgage deals as felony. He added, “We also want to look at debt adjusters, because we\’re now finding that … we have companies that may be illegitimate that are looking to try to help people with their mortgage debt.”

The Executive Director of CHFA commented that the foreclosure crisis in Connecticut was severe and there were no signs of its abatement as yet.