Community Corner

Malloy Signs Foreclosure Protection Law

The new measure seeks to protect homeowners and streamline the foreclosure process.

Written by DJ McAneny 

Gov. Dannel P. Malloy this week signed a bill granting new protections for homeowners facing foreclosure and streamlining the mediation process. 

"Ensuring a fair and expedient process for everyone in a foreclosure process is an important step towards protecting people and neighborhoods across Connecticut," Malloy said. "Everyone involved benefits when the properties remain occupied and families have access to stable housing."

Malloy was joined by the state Banks Committee co-chairs Sen. Carlo Leone and Rep. William Tong and a number of other state, local and banking officials in Stamford to sign the measure. 

Public Act 13-136, provides a judicial branch mediator to lenders and homeowners to try and work out a mutually-beneficial agreement to address outstanding payments and avoid foreclosure. It also requires all parties involved in the mediation process to act in "good faith and without delay."

"This new law will ensure lenders are more responsive to homeowners by requiring banks to have a representative who has full settlement authority to be be present at each mediation session," Malloy said. "Now, the lending institutions or their representatives are required to have someone there who could make a decision [to forward the mediation process.]"

For both lenders and homeowners involved in the mediation process, the new law lays out specific guidelines for their participation in the mediation process, according to Malloy's office: 

  • Lenders must provide the borrower with a complete account history of their mortgage, along with other related information;
  • Borrowers must assemble and provide a complete financial package to the lender at the beginning of the mediation period and in connection with requests for a foreclosure alternatives;
  • The newly-defined “Objectives of the Mediation Program” are to determine whether parties can reach an agreement to avoid foreclosure, or, failing that, to expedite the foreclosure in a manner acceptable to the parties.  The “ability to mediate” means that the parties must be willing and able to participate in the mediation process in good faith without unreasonable delay.
  • Lenders and their counsel must be familiar with the borrower’s loan file, available options for alternatives, and the history of prior mediation sessions, as reflected in the mediator’s reports.


Get more local news delivered straight to your inbox. Sign up for free Patch newsletters and alerts.

We’ve removed the ability to reply as we work to make improvements. Learn more here