Bipartisan effort to regulate banks’ handling of foreclosures
Frustration with how big banks handle foreclosures has united Democrats and Republicans behind a bill intended to force financial institutions to work with mortgage holders.
Banks frequently fail to designate a contact person on foreclosures, leaving homeowners to repeatedly begin the process of working out their troubled loans, legislators said.
“This is a much-needed measure,” said Rep. John W. Hetherington, R-New Canaan.
“More and more property owners are being whipsawed through the foreclosure process,” said Sen. Andrew McDonald, D-Stamford, co-chairman of the Judiciary Committee.
The bill was co-sponsored by the Democratic co-chairmen and ranking members of the Judiciary Committee, a rare bipartisan initiative intended to get the banking industry’s attention.
The bill gives judges the authority to block foreclosures in cases where they banks do not comply.
“They got our attention,” said Fritz Conway, a lobbyist for the Connecticut Bankers Association.
The Judiciary Committee will hold a public hearing on the bill Wednesday.
“Not every bank is going to have a problem with this, I think,” said Rep. Arthur J. O’Neill, R-Southbury, a ranking member of the Judiciary Committee.
Community banks already are in compliance; the complaints have come from the major banks and mortgage companies that have merged, such as Countrywide and Bank of America, legislators said.
Sen. John A. Kissel, R-Enfield, a ranking member of the committee, said he assumed that the problems stemmed from the mergers and bureaucracy.
“I hate to think it’s sheer callousness,” Kissel said.
Foreclosures are on the rise in Connecticut, McDonald said.
From 2000 to 2005, Connecticut averaged 10,000 foreclosures a year. They jumped to 15,000 in 2006 and rose steadily to 35,000 last year, he said.
Sign up for CT Mirror's free daily news summary.
Free to Read. Not Free to Produce.
The Connecticut Mirror is a nonprofit newsroom. 90% of our revenue comes from people like you. If you value our reporting please consider making a donation. You'll enjoy reading CT Mirror even more knowing you helped make it happen.YES, I'LL DONATE TODAY