Connecticut Passes New Foreclosure Laws

Connecticut recently passed a bill amending its foreclosure laws to, among other things, extend the end date for its foreclosure mediation program.

Substitute Senate Bill No. 891 in Connecticut, which goes into effect on October 1, 2021, amends several of the state's foreclosure laws. For instance, the new law:

  • extends the sunset date (the expiration date) for the state's foreclosure mediation program
  • requires lenders and mediators to provide and include information about their compliance with any obligation to notify the borrower about coronavirus-related foreclosure alternative options in some existing reports, and
  • establishes an emergency lien assistance program, which provides loans to homeowners facing foreclosure due to liens from municipal water or sewer charges or municipal tax debt.

Connecticut's Foreclosure Mediation Program Extended Until June 30, 2029

The new law extends the state's foreclosure mediation program's end date until June 30, 2029. Previously, the program was scheduled to expire on June 30, 2023.

Also, the new law allows teleconferences and virtual platforms for mediation sessions, rather than requiring parties to appear in person.

Coronavirus-Related Requirements for Federally Backed Mortgage Loans

Connecticut's new law also incorporates COVID-19-related requirements for federally backed loans into the foreclosure process.

Specifically, the lender must provide the following information to the mediator so that the mediator can include it in the mediation reports:

  • the history of the lender's compliance with any obligation to notify the borrower of loss mitigation or foreclosure alternative options available for that loan type, and
  • the history of foreclosure avoidance efforts that the lender voluntarily undertook with respect to the borrower.

Connecticut's Emergency Lien Assistance Program

The new law also establishes an emergency lien assistance program under the Connecticut Housing Finance Authority (CHFA) Emergency Mortgage Assistance Program. This program will provide loans to homeowners facing foreclosure due to liens resulting from municipal water or sewer charges or municipal tax debt.

Any homeowner may apply for emergency lien assistance payments if the homeowner:

  • has received notice of the lienholder's intent to foreclose the lien
  • is 60 days or more delinquent on the debt secured by a lien, or
  • anticipates being 60 days or more delinquent on the debt based on a financial hardship beyond the homeowner's control.

How to Find Connecticut's Amended Foreclosure Laws

You'll find Connecticut's foreclosure laws in the General Statutes of Connecticut, Title 49, sections 49-1 through 49-31v. Statutes change, so checking them is always a good idea. How courts and agencies interpret and apply the law can also change. And some rules can even vary within a state. These are just some of the reasons to consider consulting an attorney if you're facing a foreclosure.

Effective date: October 1, 2021