June 18, 2018

Connecticut Law Aims to Speed Up Foreclosures

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Connecticut Law Aims to Speed Up Foreclosures

Connecticut wants to battle its high foreclosure inventory with new legislation that seeks to speed up foreclosures and expedite the sales process. The state has ranked among the top 10 with the longest average delinquency for loans in foreclosure. The average delinquency there is more than 2.5 years, according to data released from Black Knight Financial Services.

Following the Foreclosure Beat

New legislation signed into law by Connecticut’s governor this summer allows home owners at the beginning of the foreclosure process to work directly with a broker and the mortgage holder to “speedily sell the property” and avoid a judicial foreclosure process, which lengthens the timeline considerably.

"Essentially, it allows for a short sale but in the very beginning of the foreclosure process," said State Representative Joe Diminico, who sponsored the legislation. “As a REALTOR® for 30-plus years, I have seen firsthand the financial difficulties many people have faced in trying to get out from under debt and reluctantly sell their homes. …  This legislation is a home run for all. It will allow for the borrower to stay in the home so it doesn't become blighted and reduce the value of the neighborhood. It will also somewhat preserve the borrower's credit scores and help the lender receive as much money as possible by having the house put up for sale on the open market in a speedier fashion.”

Some housing experts say the legislation has come at the right time as Connecticut faces a growing backlog of foreclosures. Connecticut’s bank repossessions were up by 85 percent from May 2013 to May 2014. This May also marked the 15th consecutive month for annual increases in bank repossessions, according to a report by RealtyTrac.

Source: “New Connecticut Foreclosure Law Seeks to Bypass Judicial Backlog,” HousingWire (Aug. 4, 2014)