Musto Wants Foreclosure Law Change

From State Senator Anthony Musto:

SEN. MUSTO SEEKS TO CHANGE TITLE RULES IN FORECLOSURE CASES

Proposal would level playing field between banks and homeowners

Hartford – Amidst national reports of shoddy paperwork processing that led to suspended foreclosure proceedings at many major lenders, state Senator Anthony Musto (D-Trumbull) is pushing legislation that would require banks to perfect their legal right to property before they can file a foreclosure action.

Under current state law, banks and other lenders are exempt from recording their mortgage assignments, and thus securing their rights to the mortgage, before foreclosing on property—in contrast to individuals, who must properly record such things as deeds, liens and easements in public land records to make them effective.

“Our law treats banks, mortgage holders and other lending institutions different from everyone else,” said Senator Musto, who testified in support of the bill before the General Assembly’s Judiciary Committee this past Friday. “With recent fraudulent document scandals involving some of the country’s biggest mortgage lenders, and with a foreclosure crisis planted at the root of our continuing economic troubles, it makes no sense to allow banks to skip a step required by everyone else to secure an interest in the land. This bill will remove an unreasonable exemption and provide an additional layer of security for homeowners. Banks simply need to play by the same set of rules everyone else uses.”

Formally, the bill would repeal Section 47-17 of the Connecticut General Statutes. The legislation—Senate Bill 1074, An Act Concerning Foreclosure When Legal Title Has Not Been Conveyed—currently waits for action from the Judiciary Committee.

The 2011 legislative session adjourns on June 8.

Senator Anthony Musto represents Bridgeport, Trumbull and Monroe in the state Senate, where he serves as chair of the Human Services Committee.