Bob Duff

Duff: Federal-State Settlement to Will Help Families Keep Their Homes

Connecticut to receive $200 million to provide financial relief, mortgage counseling and foreclosure prevention programs

NORWALK—State Senator Bob Duff (D-Norwalk) today praised the announcement by state and federal authorities of a $25 billion settlement with five leading mortgage lenders as a victory for Connecticut residents in need of financial relief.

The settlement represents the largest joint federal-state financial settlement in history; Connecticut’s share of the settlement is approximately $200 million.

“This settlement represents a victory for Connecticut residents,” said Sen. Duff, who is Senate Chairman of the legislature’s Banks Committee. “It provides financial assistance to help families stay in their homes, grant payments up to $2,000 to borrowers that were the victims of unfair foreclosure practices and establishes state-level foreclosure prevention programs. I want to thank Attorney General Jepsen for playing a critical role in putting an end to abusive lending practices by lenders and ensuring Connecticut residents impacted by the foreclosure received some compensation.”

Under the terms of the settlement:

• Connecticut borrowers will receive an estimated $119 million in benefits from loan term modifications and other direct relief.
• The estimated 7,500 Connecticut borrowers who lost their homes to foreclosure from January 1, 2008 through December 31, 2011 and who suffered servicing abuse will qualify for an estimated $1,500 in cash payments to individual borrowers.
• The value of refinanced loans to Connecticut’s underwater borrowers is an estimated $36 million.
• The state will receive a direct payment estimated at $27 million to help fund local foreclosure prevention programs, such as the Connecticut Department of Banking’s foreclosure prevention hotline, HUD- approved housing counselors, the Judicial Branch’s foreclosure mediation program, non-profit legal aid groups that help homeowners facing foreclosure and loan modification programs supported by the Connecticut Housing Finance Authority.