Connecticut Requires Mediation In All Residential Foreclosures

On June 19, 2008, Connecticut’s Governor, Jodi Rell, executed a Bill passed by the General Assembly establishing a Foreclosure Mediation Program in the Superior Court system.  Effective on July 1st and continuing for a period of two years only, every foreclosure of residential real estate must be accompanied by a proscribed Notice of Availability of Foreclosure Mediation.

There are many technical details to the program which are beyond the scope fo this article, but any homeowner under foreclosure has only a few days to request mediation or the window for mediation will be closed forever.  The possible solutions under mediation are seemingly endless, but there are serious defects within the program itself.

First, there is no real money in the Judicial Department’s budget to adequately fund trained mediators who may facilitate meaningful settlements in foreclosure cases.  Second, the time periods are so short there is little possibility that a homeowner can submit a mediation claim in time to be effective.  Finally, the programs also partially funded by the Act are not sufficient in size to save any meaningful number of homes in Connecticut’s inner cities, never mind the suburbs and further require that homeowners to go further into debt for a solution.

Connecticut’s legislation is but a small mirror of what our government thinks is the appropriate response to the mortgage crisis.  No meager amount of taxpayer money is sufficient to pay our way our of this crisus.  The myth of a solution may again leave homeowners only with a Chapter 13 bankuptcy case that was hamstrung by the Bankruptcy Reform Act of 2005.