The state announced Monday that it will use its share of a $25 billion federal settlement with mortgage loan service companies to help homeowners in distress.
The settlement will "provide an estimated $119 million in loan modification and refinancing relief to Connecticut homeowners, an estimated $7.3 million to Connecticut foreclosure victims, and $28.1 million in payments to the state to offset the effects of the foreclosure crisis," according to news release issued by Gov. Dannel P. Malloy's office.
The $28.1 million in payments to the state will be used to "support state and nonprofit initiatives that provide direct assistance to homeowners facing foreclosure," the release said.
“At a time when other states are using money from this settlement to plug holes in their budgets, Connecticut is taking a different path,” Malloy said. “We know that many homeowners are still struggling, and until we find a way to bring stability to the housing market, there will continue to be a drag on our recovery. This funding will help assist a critical component of our overall economic goal, to promote economic growth that is sustainable and benefits a majority of our residents.”
Attorney General George Jepsen, who was on the executive team of Attorneys General who negotiated the settlement, joined with Malloy in announcing how the money would be spent in Connecticut.
“As I travel the state, I see many Connecticut families who are still suffering from the problems created by illegal bank mortgage servicing practices," Jepsen said. "The funding announced today will go toward programs that will help those struggling families avoid foreclosure and stay in their homes."
Anyone who has a mortgage in arrears or anticipates difficulty in meeting payments should contact the state Department of Banking Foreclosure Assistance Hotline at 1-877-472-8313.