Advertisement
Advertisement

As state lawmakers consider extending foreclosure mediation, communities still see need for program

As state lawmakers consider extending foreclosure mediation, communities still see need for program
Lawmakers in Connecticut's General Assembly are considering extending the state's foreclosure mediation program through 2023. (AP photo)

Connecticut’s home foreclosure troubles may be dramatically lower statistically than a decade ago, but the Community Renewal Team in Hartford does not see a lessening need for the state’s foreclosure mediation program.

“That may be somewhere, but it’s not here where I sit,” Elizabeth Horton Sheff, director of community services at CRT and former Hartford city council member, said Thursday. “We get an average of two to three calls a day for housing counseling assistance from throughout the state from people who are in trouble with their mortgages.”

Advertisement

The General Assembly’s banking committee last week voted 10-5 to extend the program — set to expire June 30 — for another four years. The full state legislature must also back the extension and then pay for it.

Gov. Ned Lamont did not include funding for the program in his two-year budget proposal, but Lamont said last week he fully supports it. He said declining foreclosure cases in Connecticut may make it possible to fold the program into the state’s court system rather than running it as a standalone program.

On Thursday, state Rep. Ezequiel Santiago, D-Bridgeport and co-chairman of the banking committee, said initial estimates show the program would cost $1.8 million to run in 2020 and $1.9 million in 2021.

Santiago, a supporter of the legislation, said that’s considerably less than the $2.9 million in the current fiscal year. The funds would continue to come from the state Department of Banking’s “banking fund,” which is financed by the assessments on banks and credit unions doing business in Connecticut. The fund is used to run banking department operations including financial examinations and licensing.

Santiago said keeping the mediation program as a standalone program also would save the state $1.6 million in spending from the general fund. The $1.6 million would have funded 14 positions moved from the mediation program to the court system.

This program can actually mean whether they keep their home or they lose their home


Share quote & link

In 2018, 2,885 borrowers qualified for mediation, down from 3,799 in 2017 and 9,799 in 2009 at the height of the mortgage foreclosure crisis, according to the state judicial branch. Over the first decade of the program, 71 percent of those who qualified for the program worked out new loan terms with their lenders.

Horton Sheff said CRT views mediation as crucial to those seeking help from the agency. CRT offers assistance in filling out paperwork for the program and accompanying homeowners to mediation sessions in court. The agency also helps homeowners determine if they can afford to stay in a house, and if home loan borrowers get a modification of repayment terms, CRT helps monitor how well the borrowers are sticking to the plan, Horton Sheff said.

“This program can actually mean whether they keep their home or they lose their home,” she said.

Kenneth R. Gosselin can be reached at kgosselin@courant.com.

Advertisement
Advertisement