Foreclosure House Listings Continued to Grow in Connecticut
Foreclosure house listings continued to grow in Connecticut in October as mediation and loan modification programs in the state failed to prevent residential mortgages from going into foreclosure.
According to housing advocates including Waterbury lawyer Eugene Melchionne, only 14 percent of the estimated 32,000 foreclosures filed during the period from July last year to October this year were put into the Connecticut mediation program, and only 8.5 percent of these were successfully rescued from actual foreclosure.
Melchionne criticized the state mediation program, saying that it did not pursue needed modifications for about 25 percent of distressed mortgages, but instead persuaded 13.5 percent of troubled homeowners to voluntarily give back their homes to the lenders and move out of the properties.
According to the Connecticut Judicial Branch, the mediation program handled 4,448 mortgage cases for the period from July 2008 to October 2009 and successfully mediated and modified 2,721 mortgages or around 61 percent.
Additionally, the program negotiated 611 short sales or 13.7 percent of the mortgages handled, helping distressed homeowners protect their credit records from being tainted with foreclosures.
With 3,332 mortgage cases negotiated or around 75 percent under the mediation program, Connecticut Governor M. Jodi Rell lauded the program, focusing on the 75-percent success rate in preventing mortgages from entering foreclosure house listings.
In response to criticism that the figures presented by state officials were manipulated, Robert Palmer of the Judicial Branch, explained that the data released by the branch in November did not reflect all cases being handled by mediators.
He added that more than 10,000 troubled mortgages have been handled by the program and that the 32,000 home foreclosure cases mentioned by Melchionne included a lot of cases that are not qualified for state mediation or loan modification.
According to Palmer, foreclosures arising from tax and condo fee delinquencies are not qualified under the program. Only residential units that are owner-occupied and are being used as primary residences are eligible for assistance.
Palmer also explained that the mediation program is not mandatory. What is mandatory is the notification of distressed homeowners that the state mediation program is available to help them rescue their homes from foreclosure.
In a separate report, the pace of foreclosure activity in Connecticut rose by more than eight percent in October to more than 2,300 filings, including more than 500 properties already taken back by lenders and posted in their foreclosure house listings.
