DeLauro urges mortgage, foreclosure rules
Frank Juliano, Staff Writer
Updated 03:36 p.m., Monday, January 30, 2012
- Representative for Connecticut's 3rd congressional district, Rosa DeLauro speaks during the screening in Washington, DC, for the TV movie "Five" hosted by Lifetime and Jennifer Aniston on Oct. 3, 2011. DeLauro, with Attorney General George Jepsen in Milford on Monday, urged support for a bill that she says would standardize mortgage servicing and foreclosures. (Photo by Paul Morigi/Getty Images for Lifetime) Photo: Paul Morigi, Getty / 2011 Getty Images
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MILFORD -- U.S. Rep. Rosa DeLauro, D-3rd, urged support Monday for a bill she has introduced that she says would standardize mortgage servicing and foreclosures.
DeLauro's bill mirrors a multistate settlement to be announced as soon as next week that will require one point of contact for a customer seeking a mortgage modification and an independent review of the documents. The settlement will also bar "dual tracking,'' in which a lender pursues loan modification and foreclosure at the same time, said Attorney General George Jepsen, who supports the measure.
The two officials held a news conference at the Milford United Way to explain their efforts to protect homeowners from what the congresswoman called "the most important issues affecting the economic recovery. We have a moral responsibility to do something in this area.''
Jepsen said the agreement, which took more than a year to negotiate, could ultimately cover residents of 40 states. Besides the new safeguards, the settlement will have money -- about $27 million in Connecticut -- to help those still struggling to pay mortgages on devalued properties and to aid those harmed by the "robo-signing'' and other industry scandals.
"Unlike the tobacco settlement, this money will not go into the state's general fund, but will be used to help those directly affected,'' the attorney general said. But the proposed settlement only covers the nation's five largest lenders, who account for about 60 percent of all the mortgages outstanding. "We need something that is enshrined as public policy, not just a negotiated settlement.''
DeLauro said that her bill will allow borrowers to sue for damages, and in some states they may also be able to use the terms of the legislation to stop a foreclosure when paperwork snafus or handling errors affected the decision on a loan.
The House bill has no co-sponsors yet. "I am seeking bi-partisan support because obviously facing the loss of your home is not a partisan issue,'' DeLauro said. A similar bill has been introduced in the U.S. Senate.
Jeff Gentes, an attorney at the Connecticut Fair Housing Center, said that although the legislation would allow another unit of the same bank processing the loan to do the review, "the two departments do operate independently. It is taking advantage in a good way that one hand doesn't know what the other is doing.''
A Bethany couple, Rick and Dawn Murphy, detailed their battle with the Bank of America to stave off foreclosure. After they got their mortgage modified Dawn filed for bankruptcy and the bank tried to restart the process, the couple said.
An existing law prohibits that, said Gentes, who worked with the Murphys. "But the bank also refused to accept their payments and then wanted to say that they were behind on their agreement.''
Reach Frank Juliano at 203-520-6986 or fjuliano@ctpost.com
Read more: http://www.ctpost.com/local/article/DeLauro-urges-mortgage-foreclosure-rules-2839026.php#ixzz1kz0Pj8c6
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