Connecticut Legislative Update

Connecticut Legislative Update

The Connecticut legislature recently amended its laws governing foreclosure mediation, effective July 1, 2015.

 

CONNECTICUT HOUSE BILL 6752

 

“Mortgagor” (borrower) means the owner-occupant of one-to-four family residential real property located in Connecticut, which is the primary residence of such owner-occupant, who is also the borrower under a mortgage encumbering such residential real property, or if not the borrower under such a mortgage, is a permitted successor-in-interest, except an heir or occupying non-owner of a property encumbered by a reverse annuity mortgage.

 

“Permitted successor-in-interest” means a person who is a defendant in a foreclosure action with a return date on or after October 1, 2015, and either the former spouse of a decedent-borrower, who acquired sole title to the residential real property by virtue of a transfer from the decedent-borrower’s estate or by virtue of the death of the decedent-borrower where title was held as joint tenants or tenants in the entirety, or the spouse or former spouse of a borrower or former mortgagor who acquired title to the residential real property by virtue of a transfer from such borrower or former borrower where such 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 ensures that all necessary consents to the disclosure of nonpublic personal financial information have been provided to the lender.

 

The foreclosure mediation program provisions have been extended from July 1, 2016 until July 1, 2019.

 

With respect to actions with a return date on or after October 1, 2015, in order to ensure that all necessary consents to the disclosure of nonpublic personal financial information have been provided to the lender, such that a spouse may be considered a permitted successor-in-interest, the court will confirm that the foreclosure mediation certificate submitted by the spouse or former spouse provides consent to the full disclosure by the mortgagee of such spouse’s or former spouse’s nonpublic personal financial information to any other person who is obligated as a borrower on the note, to the extent the lender has such information, and any other person who is a borrower provides consent to the full disclosure by the lender of such person’s nonpublic personal financial information to such spouse or former spouse, to the extent the lender has such information.  If a foreclosure mediation certificate is not submitted by a borrower, other than a spouse or former spouse claiming to be a permitted successor-in-interest, the court will confirm that the foreclosure mediation certificate submitted by the spouse or former spouse contains a statement, signed by the spouse or former spouse, certifying that all persons who are obligated on the note have otherwise given documentation to the lender which allows for the full disclosure by the lender of such person’s nonpublic personal information to the spouse or former spouse, to the extent the lender has such information.  Such a certification may be rebutted conclusively by the lender if the lender submits a written statement to the court in which the lender certifies that, based upon reasonable belief, the lender does not possess such documentation.

 

Promptly upon receipt of the notice of assignment, but not later than the 35th day following the return date, the lender or its counsel must deliver to the mediator (in addition to the prior documents), via the email address provided for communications related to the mediation, and to the borrower, via first class, priority, or overnight mail a copy of the note and mortgage, including any agreements modifying such documents.

 

As soon as practicable, but no later than the 84th day following the return date, or the extended deadline if such an extended deadline is established, the mediator must facilitate and confirm the submission by the borrower of the forms and documentation to the lender’s counsel via electronic means and, at the lender’s election, directly to the lender per the lender’s instruction, and determine, based on the borrower’s attendance at the meetings and the extent the borrower completed the forms and provided the documentation, or failed to perform the tasks through no material fault of the lender, and file a report with the court indicating:

·        Whether mediation will be scheduled with the lender;

·        Whether the borrower attended scheduled meetings with the mediator;

·        Whether the borrower fully or substantially completed the forms and provided the documentation requested by the lender;

·        The date on which the lender supplied the forms and documentation; and

·        Any other information the mediator determines to be relevant to the objectives of the mediation program.

 

The mediator may file, and the court may grant, a motion for extension of the premediation period beyond the 84th day following the return date if good cause can be shown for such an extension.  Any such motion must be filed, with a copy simultaneously sent to the lender and as soon as practicable to the borrower, not later than the 84th day following the return date. The lender and borrower must each have 5 business days from the day the motion was filed to file an objection or supplemental papers, and the court will issue its ruling, without a hearing, not later than 10 business days from the date the motion was filed. If the court determines that good cause exists for an extension, the court will establish an extended deadline so that the premediation period will end as soon thereafter as may be practicable, but not later than 35 days from the date of the ruling, taking into account the complexity of the borrower’s financial circumstances, the lender’s documentation requirements, and the timeliness of the lender’s and borrower’s compliance with their respective premediation obligations.  If the court denies the mediator’s motion, the extended deadline will be 3 days after the court rules on the motion.