June 26, 2015
by Mark Piech
and Adam Bendett
Bendett & McHugh, P.C.
USFN Member (Connecticut, Maine, Vermont)
On June 1, 2015 the Connecticut Legislature passed Substitute House Bill 6752, An Act Extending the Foreclosure Mediation Program (the Amendment). The Amendment makes one substantive and a few minor changes to the Foreclosure Mediation Program. A summary of some of the Amendment’s changed provisions are set forth below.
The effective date of the provisions of the Amendment is July 1, 2015. The Amendment extends the sunset provision of the Foreclosure Mediation Program through June 30, 2019. The original expiration date was June 30, 2016. Please note, any mediation application submitted prior to the expiration date will be subject to the Foreclosure Mediation Program.
Expanded Eligibility of Parties — The mediation program has been expanded to cover non-borrowers that are permitted successors-in-interest. A “permitted successor-in-interest” is defined in the Amendment as a person who is a defendant in a foreclosure action with a return date on or after October 1, 2015, and is either: (A) the former spouse of a decedent-mortgagor, who acquired sole title to the residential real property by virtue of a transfer from the decedent-mortgagor’s estate or by virtue of the death of the decedent-mortgagor where title was held as joint tenants or tenants in the entirety; or (B) the spouse or former spouse of a mortgagor or former mortgagor who: (i) acquired title to the residential real property by virtue of a transfer from the mortgagor or former mortgagor where the transfer resulted from a court decree dissolving the marriage, a legal separation agreement, or a property settlement agreement incidental to such a decree or separation agreement, and (ii) ensures that all necessary consents to the disclosure of nonpublic personal financial information have been provided to the mortgagee in accordance with the Amendment. These parties may now participate in the Foreclosure Mediation Program. Please note, however, that some judges were typically referring such parties into the Foreclosure Mediation Program, either upon motion or sua sponte, so this statutory change does not practically alter successor-in-interest eligibility in many cases.
Mortgagee Requirement — In addition to the other documents that a mortgagee must produce to the borrower and mediator within 35 days of the return date, all past agreements modifying the note or mortgage and current versions of all reasonably necessary loss mitigation forms must now be provided.
Pre-mediation Period — The Amendment also provides leeway to the court system in scheduling and providing the borrower’s financial documents to the mortgagee or its counsel. Prior to the passage of the Amendment, the mediator had 84 days from the return date to provide the borrower’s financial package to the plaintiff’s counsel. The Amendment now allows this 84-day deadline to be extended upon motion of the mediator for good cause shown. Because the court rarely enforced the previous deadline, this change has a limited practical impact.
Reporting from Court to Legislature — The Amendment continues the Chief Court Administrator’s obligation to submit a summary of the mediation program, and specified data collected by the mediators’ reports, to the legislature by March 1, 2016 and each year thereafter until March 1, 2019.
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