August 1, 2018

by James Pocklington
McCalla Raymer Leibert Pierce, LLC
USFN Member (Connecticut, Florida, Georgia, Illinois)

Connecticut’s 2018 legislative session ended with limited impact on the industry — with the year more defined by the legislation that was proposed, but did not pass. Unsuccessful proposals included ones to remove the sunset of Connecticut’s mediation program, to substantially alter collections and assignment of municipal tax liens, and to establish a minimum size for water and sewer lien assignments. Among the legislation that did pass, however, there are three bills that may be of interest to the industry:

SB 391 (signed by the governor on June 1) — An act eliminating the requirement that a mortgagor represented by counsel attend the first foreclosure mediation session made a procedural change to the Foreclosure Mediation Program, allowing mortgagors who are represented by counsel to attend mediation telephonically for all mediation sessions. This change was made in 2015 to subsequent mediation sessions, but was inadvertently not applied to the separate statutory language for the first mediation session. This bill corrected the oversight. There is little direct mortgagee impact expected from the change, but it may slightly improve mediation timelines by allowing initial sessions that would otherwise require rescheduling to occur.

SB 485 (signed by the governor on June 4) — An act concerning the provision of a payoff statement by a judgment lienholder established requirements for a junior lienholder to provide a written payoff statement on request of the debtor, debtor’s attorney, or other authorized representative. This may impact mortgagees conducting loss mitigation reviews, as the amount remaining on a junior judgment lien (that would need to be resolved for short sale or to ensure a fully enforceable first-lien position) may now be easier to acquire.

SB 150 (signed by the governor on May 29) — An act providing protections for consumers applying for reverse mortgages added a requirement on the mortgagee that, prior to accepting a “final and complete” reverse mortgage application or assessing any fees for same, the prospective applicant must be provided with a list of HUD-approved counseling agencies (consistent with 24 CFR 206.300) and receive a certification from the applicant or applicant’s representative that such counseling has occurred, signed by both the applicant/representative and the counselor. Violation of this requirement is deemed a violation of Connecticut’s Unfair Trade Practices Act.

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