Connecticut lawmakers hope to help distressed homeowners deal with lenders who negotiate loan mods with one hand while foreclosing with the other by implementing a mandatory eight-month stay on foreclosure processes when homeowners enter mediation with a lender[1]. “This is an effort to let the mediation process play itself out and give them space,” said state representative William Tong (D-Stamford). Tong is co-chair of the state legislature Banks Committee. This effort is designed to supplement the state’s groundbreaking foreclosure mediation program, which is run by the state judicial branch and is mandatory for homeowners facing foreclosure. State senator Bob Duff (D-Norwalk) believes that the 8-month stay is necessary because although “a lot of people were able to work things out within three months…there were some very difficult cases out there and those took longer”[2]. The state has argued that this massive regulation is necessary because foreclosures are hurting home values too much in the state.
Connecticut also recently attempted to cut MERS out of the equation in property transactions by passing a bill requiring foreclosing entities to register properties directly with town clerks or face fines.
Do you think that Connecticut is setting a good example, or does the state legislature just need to stay out of the real estate market and let the recovery happen on its own?
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[1] http://www.ctpost.com/local/article/Tweak-of-foreclosure-mediation-law-carries-1430195.php
[2] http://www.stamfordadvocate.com/local/article/Tweak-of-foreclosure-mediation-law-carries-1430206.php
Keep the Government OUT of any business, small Government, less taxes, only 2 terms to Congress man and Senators
Although it looks as if the Connecticut legislature is doing something for the people, I feel it’s about control. They want the control over the banks and the situation; which is a typical political manuever. The banks get the money from the stimulus package if they foreclose, not by doing loan mods. It’s a money choice for the bank; they make more by foreclosing, so why go past the trial loan mod period? If you check the number of loan mods approved vs trials, I think you’d be surprised.
How much does all this cost the state taxpayers? Whatever they do, the banks will find a way around their oversight. Just have them stay out of it and let the free market work itself out.
They are doing the right thing! The banks are being PAID by the Federal Government to foreclose on citizens THAT is why they won’t modify loans! It’s pure profit motive! The FDIC (that’s your money and mine, my friends) covers losses due to foreclosure or short sale, which is driving values into the ground, but there is no incentive to modify. Banks are doing what banks do, acting from pure profit motive. How government needs to do what it was intended to do, protect citizens. Have we all forgotten that the banks BROKE THE LAW! If they wre human they would all be in JAIL! Come on, let’s get real here, put partisan politics aside, let’s for once act out of humanity and not pure greed, and let’s fix this mess! There is only ONE way to do that, and that is to modify mortgages, plain and simple!
I think Connecticut is setting a good example. By requiring additional time for distressed homeowners to proceed with a loan mod or short sale, this state’s lawmaker’s are helping with the recovery. Quick foreclosures, questions about the rightful foreclosing entity, and a glut of abandoned lower-priced foreclosed homes on the market aren’t necessarily the answers to market recovery. Further, I don’t believe the state is interfering with the real estate market; it’s protecting consumers.