Foreclosures at Record High Levels in Connecticut Causes Concern

Foreclosures have reached record high levels in Connecticut causing grave concern. Attorney General Richard Blumenthal is proposing legislation that will give protection to foreclosure victims. It will also save borrowers to fall into the trap of foreclosure rescue scams that offer help for a fee but never deliver the goods.

As part of the new measures, the existing rules will be made more stringent. Any group offering to help will have to be a non-profit counseling body under the regulation of the state. This will avoid the gaps that permit nefarious activity of charging fees and duping foreclosure victims and reo homes. In some instances scammers even manage to take over the title of the house.

Blumenthal admitted that innumerable borrowers facing foreclosure have been cheated by such plans. Recently they have been increasing in number as foreclosures continue to sweep the state and unemployment figures worsen. His office is busy investigating many such cases and making a list of the offenders. Blumenthal said, “They sink consumers like quicksand through financial schemes that doom families to deeper debt, even as they struggle.”

The companies offering help must not only belong to the non-profit category but the activities and operations must be clearly stated in a contract. The consumer will have the right to cancel it within three days of acceptance. Upfront fees are totally prohibited.

At a press conference other important lawmakers and those advocating for housing accompanied Blumenthal. Rep Kenneth Green (Democrat Hartford) is the chairperson of the housing committee of the Legislature. He said, “They don’t realize they get promised a lot of things, but they don’t get the delivery of those services.” Green feared that if the economy continued to slump the problem would get worse with more job losses, mortgage defaults and foreclosures.

Till the end of September Connecticut had suffered 18,600 foreclosures inclusive of defaults. This figure tantamounts to 3.5% of all the house loans as per the findings of Mortgage Bankers Association. It compares badly with 16,560 foreclosures counting to 3.1 % of the total as on 30th June 2008.

Senator Bob Duff (Democrat – Norwalk) as well as Rep Ryan Barry (Democrat – Manchester) said that the suggestions of Blumenthal were based on the lending reforms and measures taken in the previous General Assembly session.

There is a sense of urgency about solving the foreclosure crisis at all levels as the entire socio-economic structure of the country is at stake.