July 23, 2015
by Richard M. Leibert
Hunt Leibert – USFN Member (Connecticut)
Connecticut’s Mediation Law as Amended by the Legislature in HB 6752 was changed effective July 1, 2015.
The changes are as follows:
1. The Mediation Program was scheduled to terminate on July 1, 2016. That termination date has been extended to July 1, 2019.
2. The definition of “mortgagor” was amended to ensure that the mortgaged property is the primary residence of the owner-occupant.
3. Any foreclosure complaints filed after October 1, 2015 may allow the following foreclosure defendants, which the legislature has designated “permitted successors-in-interest” to participate in mediation:
a. the former spouse of a decedent-mortgagor who acquired sole title to the residential real property by virtue of a transfer from his or her spouse’s estate or by virtue of the death of the mortgagor where title was held as joint tenants in the entirety; OR
b. the spouse or former spouse of a mortgagor or former mortgagor who acquired title to the residential real property by virtue of a transfer from such mortgagor or former mortgagor where such transfer resulted from a court decree dissolving the marriage, a legal separation agreement, or a property settlement agreement.
4. To qualify as a permitted successor-in-interest, the spouse or former spouse must ensure that the mortgagee has received all consents under law to the disclosure of the spouse’s or former spouse’s nonpublic personal financial information.
a. The court is required to confirm that the foreclosure mediation certificate submitted by the spouse or former spouse provides the above consent to full disclosure; AND
b. Any other person who is a mortgagor provides consent to the full disclosure by the mortgagee of such person’s nonpublic personal financial information to such spouse or former spouse to the extent that the mortgagee has such information.
If a foreclosure mediation certificate is not submitted by a mortgagor, other than a spouse or former spouse claiming to be a permitted successor-in-interest, the spouse or former spouse signing the mediation certificate can include a certification that all persons obligated on the note have consented to the mortgagee’s full disclosure of their nonpublic personal information to the spouse or former spouse.
Such mediation certificate can be rebutted conclusively by the mortgagee if the mortgagee submits a written statement to the court in which the mortgagee certifies that, based upon reasonable belief, the mortgagee does not possess such documentation allowing the full disclosure.
5. Additional Documents Mortgagee Must Send: Under current law, the mortgagee or its counsel, upon receiving notice of a case assignment to the mediation program and within 35 days of the return date of the foreclosure case, shall send an account history and related information via email to the mediator and via first-class, priority, or overnight mail to the mortgagor. The related information includes all necessary forms needed for the mortgagee to evaluate the mortgagor for common foreclosure alternatives that are available through the mortgagee, if any. The amendment requires the mortgagee to send the most current version of these forms. The amendment also requires the mortgagee to send, in addition to a copy of the note and mortgage, any agreements modifying the note and mortgage.
6. Pre-mediation Extension: Under current law, the court must: (1) assign a foreclosure mediator, and (2) schedule a meeting with the mediator and the mortgagor. Current law requires the scheduling of a pre-mediation meeting within 49 days following the return date of the foreclosure complaint.
Under current law, the mediator must facilitate and confirm submission of the forms and documentation by the mortgagor: (1) to the mortgagee’s counsel electronically, and (2) at the mortgagee’s election, directly to the mortgagee per the mortgagee’s instruction. Current law requires the mediator to do so as soon as practicable within 84 days following the return date.
The new law extends this deadline to: (1) the end of any pre-mediation period extension granted by the court (see below); or (2) three days after the court rules to deny a motion for such an extension. The new law allows the court, for good cause, to grant a mediator’s motion to extend the pre-mediation period beyond the 84th day, following the return date.
The mediator must file such motion, with a copy simultaneously sent to the mortgagee, and as soon as practicable to the mortgagor, not later than the 84th day following the return date. The mortgagee and mortgagor must file an objection or supplemental papers within five business days after the day that the motion for extension was filed. The court must issue its ruling, without a hearing, by 10 business days after the date that the motion was filed. If the court determines that good cause exists for an extension, it must establish an extended deadline so that the pre-mediation period ends as soon as practicable, but not later than 35 days after the ruling.
The court must consider the complexity of the mortgagor’s financial circumstances, the mortgagee’s documentation requirements, and the timeliness of the mortgagee’s and mortgagor’s compliance with their respective pre-mediation obligations. If the court denies the mediator’s motion, the extended deadline shall be three days after the court rules on the motion.
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