Connecticut launches mortgage assistance forum; braces for prolonged shutdown

Homeowners falling behind on payments or facing foreclosure will have a shot at getting some needed relief when state officials host their sixth mortgage assistance event next week.

As they continue to juggle finances in response to the federal government shutdown, Gov. Dannel P. Malloy, Attorney General George Jepsen and Banking Commissioner Howard F. Pitkin announced a forum for distressed homeowners to be held Oct. 22 at the Connecticut Convention Center in Hartford.

“If somebody can show they can sustain themselves in a residence, then we’re going to do everything we can to keep them in that residence,” Malloy said, calling the event a great opportunity for those at risk of foreclosure, or for homeowners who mortgage exceeds the value of their home.

Homeowners will have an opportunity to meet face-to-face with representatives of 15 banks or other lending institutions, as well as counselors, pro bono attorneys and members of nonprofit agencies. The event runs from 10 a.m. to 7 p.m.

This will be the sixth mortgage assistance forum the state has sponsored since 2011. “We’ll keep doing these until there’s no further need,” Malloy said.

The event is an outgrowth of a 2012 settlement Connecticut and 48 other states reached with the nation’s five largest mortgage lenders, which agreed to pay $26 billion to compensate homeowners for foreclosure processing abuses.

In what became known as the “robo-signing scandal,” banks acknowledged that their representatives signed countless mortgage-related documents attesting to facts about which they had little or no knowledge.

More than 6,000 Connecticut homeowners have received over $450 million in relief since the settlement was reached, said Jepsen, whose office helped negotiate the deal.

State government here received $27 million and Jepsen said Connecticut, unlike some other states, has dedicated all of those funds for homeowner assistance.

Malloy called the Oct. 22 event “a great opportunity for anyone who’s having trouble making their payments,” and added he fears the need to aid homeowners could become greater if the political and fiscal gridlock continues on Capitol Hill.

The governor said his “hunch” is that both parties could craft a deal that would keep the nation from defaulting on debt, but worries the federal government shutdown that began Oct. 1 will continue. “It appears to me, if I had to bet, that they are not going to reopen the government” in the immediate future, he said.

The Democratic governor laid the blame for the shutdown at the feet of the most conservative Republicans in Washington.

“This is not a Republican Party that any of us would recognize,” Malloy said. “This Republican Party has been hijacked by a hyper-political group of people who are more than willing to cut off your nose to spite your face.”

Connecticut has spent about $900,000 in state funds to date to preserve programs normally covered with federal dollars.

“We do not have unlimited amounts of money,” the governor said, adding that certain programs can’t be allowed to fall by the wayside.

“We cannot have pregnant women go without nourishment. We cannot have young children go without nourishment,” he said. “That’s a reality.”

Malloy also cited early childhood education and support services for veterans as top priorities.

The governor said he doesn’t believe Connecticut needs to plan any emergency borrowing at this time, but added that his administration continues to develop contingency options to handle a prolonged federal shutdown.

“We’re getting ready and I will speak to that issue in the coming days,” he said, adding that planning also involves outreach to various health care and social service providers.

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