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Connecticut Governor Calls for Six-Month Foreclosure Suspension

""Connecticut Governor M. Jodi Rell"":http://www.ct.gov/governorrell/site/default.asp is proposing a six-month suspension on all residential foreclosures in the state, as well as protection for some tenants whose landlords are in foreclosure, the governor's office ""announced this week"":http://www.ct.gov/governorrell/cwp/view.aspxA=3293&Q=428452.
During the six-month moratorium, homeowners would be required to continue paying interest and taxes on the property, and a 60-day mediation period would be mandatory for all contested foreclosures. Under current law, mediation is optional.
In addition, to protect renters, owners of properties with five or fewer rental units will be required to notify tenants within seven days of receiving a notice of foreclosure or filing for protection from creditors under bankruptcy laws. An increasing number of renters are coming home to find a foreclosure sign in front of their duplex or small apartment building - the first indication any of them have had that the place where they live is in any kind of jeopardy, Rell explained in a press statement.
""These are common-sense protections and precautions that will help Connecticut residents hang on to the single greatest asset most of us will ever have - our homes,"" Governor Rell said. ""They will also ensure that renters are not inadvertently caught up in a financial whirlwind over which they have no control at all.
""Banks and other mortgage lenders do not ‘win’ in situations like this by foreclosing on property,"" the Governor continued. ""Both they and the homeowner have much more to gain by working together to find a mutually acceptable payment program. So, too, do other residents of Connecticut neighborhoods, who would only see the values of their own homes decline if we allow a wave of foreclosures to wash through the state.
The foreclosure moratorium is part of a three-point legislative plan. It also includes 25 million dollars in federal aid to cities and towns that will be used to buy, fix up, and sell foreclosed properties, and will expand the state's new foreclosure mediation program to make participation mandatory for borrowers fighting to stay in their homes. Currently, participation is voluntary.
Earlier this month, Governor Rell announced that Connecticut homeowners using the refinancing program she created last December have reduced their monthly payments by an average of $397. The Governor’s ""$40 million CT FAMLIES"":http://www.ct.gov/governorrell/cwp/view.aspxA=3293&Q=427746 (Connecticut Fair Alternative Mortgage Lending Initiative and Education Services) was created specifically in response to the subprime mortgage crisis and was one of the first state programs in the nation to address the foreclosure turmoil, according to the governor's office.
Foreclosures in Connecticut are not rising as rapidly as in other regions of the country. Still, the state saw an annual increase of nearly 18 percent for foreclosure filings during the third quarter, according to ""The Warren Group"":http://www.thewarrengroup.com, a Boston-based real estate research firm.
Governor Rell's new housing proposal still requires legislative approval, but she hopes to include it in a special session of the state's legislature being held Monday.

About Author: Carrie Bay

Carrie Bay is a freelance writer for DS News and its sister publication MReport. She served as online editor for DSNews.com from 2008 through 2011. Prior to joining DS News and the Five Star organization, she managed public relations, marketing, and media relations initiatives for several B2B companies in the financial services, technology, and telecommunications industries. She also wrote for retail and nonprofit organizations upon graduating from Texas A&M University with degrees in journalism and English.
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