General Assembly Proposed Bill No. 6738
January Session, 2017 LCO No. 2543
*02543*
Referred to Committee on BANKING
Introduced by:
REP. DELNICKI, 14th Dist.
General Assembly
Proposed Bill No. 6738
January Session, 2017
LCO No. 2543
*02543*
Referred to Committee on BANKING
Introduced by:
REP. DELNICKI, 14th Dist.
AN ACT CONCERNING DEFICIENCY JUDGMENTS AND CRUMBLING FOUNDATIONS.
Be it enacted by the Senate and House of Representatives in General Assembly convened:
That section 49-14 of the general statutes be amended to provide that (1) no deficiency judgment may be sought or enforced against any one or more individual mortgagors, mortgage borrowers or guarantors, where the deficiency arises from an impairment to the fair market value of real estate due to the presence of a failed or failing residential foundation associated with the presence of pyrrhotite, provided the mortgage lender is named an insured or additional insured party under a homeowner's insurance policy; (2) in the case of any strict foreclosure, judicial foreclosure, deed in lieu of foreclosure or other compromise on a mortgage obligation where subdivision (1) would apply, no mortgage lender may report to any credit reporting agency or otherwise publicly disclose such foreclosure or compromise as being subject to deficiency and shall report any mortgage default as arising from a casualty and subject to pending insured recovery; and (3) no mortgage lender shall deny the extension of mortgage credit on a first mortgage loan with respect to a primary residence based in whole or in part on any mortgage default, foreclosure, deed-in-lieu of foreclosure or other mortgage compromise described in subdivision (2) and any such lender having improperly denied credit shall be penalized up to ten thousand dollars per violation by the Department of Banking.
Statement of Purpose:
To protect mortgagors harmed by crumbling foundations.