§ 8-265gg — Monthly payments by authority and homeowner. Periodic review of financial circumstances. Modification to amount of payment. Emergency lien assistance payments by authority. Foreclosure of lien.

Connecticut § 8-265gg

• Jurisdiction: Connecticut
• Title 8: Zoning, Planning, Housing and Economic and Community Development
• Ch. 134: Connecticut Housing Finance Authority Act

Text

(a) If the authority approves a homeowner for mortgage assistance under the provisions of section 8-265ff, the authority shall make emergency mortgage assistance payments, which may, at the discretion of the authority, be in the form of monthly emergency mortgage assistance payments, lump sum emergency mortgage assistance payments or any combination thereof. Such payments shall be made directly to each mortgagee secured by the homeowner's real property in a total amount that does not exceed the amount of sixty months of emergency mortgage assistance payments, which amount shall include any such payments that the authority provides to reinstate a homeowner's mortgage or lien to a current status with the initial disbursement of an emergency mortgage assistance payment, either consecutively or nonconsecutively, except no such payments shall be made after sixty months have passed since the date of the initial payment. The total monthly payment made by the authority, to or on behalf of a homeowner under subsection (c) of this section, shall be not more than twenty-eight per cent of one hundred forty per cent of annual area median income, as published by the United States Department of Housing and Urban Development, divided by twelve. Upon receipt of payment in full from a homeowner of the monthly amount established under subsection (b) of this section, the authority shall pay to each mortgagee the full amount then due to the mortgagee pursuant to the terms of the mortgage without regard to any acceleration under the mortgage. Such payments shall include, but not be limited to, principal, interest, taxes, assessments and insurance premiums. The initial payment made by the authority to each mortgagee may be an amount which pays all arrearages, reasonable costs and reasonable attorney's fees incurred by the mortgagee in connection with foreclosure of the mortgage, and, if approved by the authority as part of a restructuring of the mortgage debt, a sum to reduce the principal balance of the mortgage to an amount that will cause the homeowner to have a reasonable prospect of resuming full periodic mortgage payments following the disbursement of all emergency mortgage assistance payments provided by the authority under this subsection. (b) A homeowner on whose behalf the authority is making emergency mortgage assistance payments shall, during the period in which such assistance is provided, make monthly payments to the authority in lieu of the homeowner's monthly mortgage payments. Such payments to the authority shall be: (1) In an amount which shall cause the homeowner's total housing expense to be not greater than forty-five per cent of the homeowner's aggregate family income; or (2) if greater than the amount described in subdivision (1) of this subsection, in an amount which shall cause the ratio of the homeowner's total housing expense to aggregate family income to be not greater than such ratio for the one-year period immediately preceding the date when the homeowner experienced the financial hardship beyond the homeowner's control. The homeowner shall make such payments to the authority not later than seven days before each mortgage payment is due to the mortgagee. (c) The amount by which the emergency mortgage assistance payments made by the authority to the mortgagee exceeds the payments made by the homeowner to the authority shall be a loan in that amount made by the authority to the homeowner. Any such loan shall be evidenced by such documents as the authority may require and may be subject to repayment with interest, if any, and secured as provided in section 8-265hh . (d) The authority shall establish procedures for periodic review of the homeowner's financial circumstances for the purpose of determining the necessity for continuation, termination or adjustment of the amount of emergency mortgage assistance payments or adjustment of the payments by the homeowner pursuant to subsection (b) of this section. Payments shall be discontinued when the authority determines that, due to changes in the homeowner's financial condition, the payments are no longer necessary in accordance with the standards contained in section 8-265ff , the maximum amount of emergency mortgage assistance payments allowed under subsection (a) of this section has been provided or the sixty-month period established under subsection (a) of this section, during which one or more emergency mortgage assistance payments were provided, has expired, whichever is sooner. A foreclosure of the homeowner's mortgage may, at any time thereafter, proceed without further restriction or requirement under sections 8-265cc to 8-265hh , inclusive. The authority may adjust payments by the homeowner pursuant to subsection (b) of this section based on a review under this subsection. (e) If the homeowner fails to pay to the authority any amounts due under subsection (b) of this section within seven days of the date due to the authority, the authority: (1) May, at the discretion of the authority, nevertheless advance emergency mortgage assistance payments to the mortgagee; and (2) shall, upon the homeowner's request, review the homeowner's financial circumstances to determine whether the delinquency is the result of additional financial hardship due to circumstances beyond the homeowner's control. If the homeowner does not demonstrate to the satisfaction of the authority that the delinquency is the result of additional financial hardship due to circumstances beyond the homeowner's control in the homeowner's financial circumstances, the authority may terminate emergency mortgage assistance payments and the foreclosure of the homeowner's mortgage may, at any time thereafter, continue without any further restriction or requirement under sections 8-265cc to 8-265kk , inclusive. If the delinquency is the result of a change in the homeowner's financial circumstances, the authority may modify the homeowner's required monthly payments to the authority. (f) If any mortgagee scheduled to receive payments from the authority under the provisions of sections 8-265cc to 8-265kk , inclusive, fails to receive the full amount of such payment from the authority within thirty days of the scheduled due date, or if the homeowner fails to observe and perform all of the terms, covenants and conditions of the mortgage, the mortgagee shall provide a fifteen-day notice to the authority and the foreclosure of the homeowner's mortgage may, at any time thereafter, proceed without any further restriction or requirement under sections 8-265cc to 8-265kk , inclusive. (g) If the authority approves a homeowner for emergency lien assistance under the provisions of section 8-265ff , the authority shall make emergency lien assistance payments directly to each lienholder secured by the homeowner's real property for (1) the full amount due and payable to the lienholder under the lien, or (2) the full amount due and payable to the lienholder under the lien for the thirty-six-month period commencing on the date the first tax, water, assessment or usage charge underlying the lien became due and payable, whichever is less. Such payment may be in an amount which pays all arrearages and pays reasonable costs and reasonable attorney's fees incurred by the lienholder in connection with the foreclosure of the lien. (h) The amount of the emergency lien assistance payments made by the authority to the lienholder shall be a loan in that amount made by the authority to the homeowner. Any such loan shall be evidenced by such documents as the authority may require and shall be subject to repayment with interest and secured as provided in section 8-265hh . (i) If any lienholder scheduled to receive payments from the authority under the provisions of sections 8-265cc to 8-265kk , inclusive, fails to receive the full amount of such payment from the authority within thirty days of the scheduled due date, or if the homeowner fails to observe and perform all of the terms, covenants and conditions of lien, the lienholder shall provide a fifteen-day notice to the authority and the foreclosure of the lien may, at any time thereafter, proceed without any further restriction or requirement under sections 8-265cc to 8-265kk , inclusive.

Legislative History

(P.A. 93-414, S. 5, 10; P.A. 94-185, S. 5, 10; P.A. 08-176, S. 9; P.A. 09-209, S. 32; 09-219, S. 1; June 12 Sp. Sess. P.A. 12-1, S. 128; P.A. 21-44, S. 10, 11; P.A. 24-66, S. 3.) History: P.A. 93-414 effective July 1, 1993; P.A. 94-185 made technical changes, effective June 2, 1994; P.A. 08-176 amended Subsec. (a) to change time limit for assistance payments from 36 to 60 months and change provision re initial payment to allow, rather than require, authority to pay an amount which pays all arrearages and reasonable costs and attorney's fees, and amended Subsec. (d) to change reference to mortgage eligibility period from 36 months to 60 months and to make a technical change, effective July 1, 2008; P.A. 09-209 made a technical change in Subsec. (d); P.A. 09-219 changed effective date of P.A. 09-209, S. 32, from October 1, 2009, to July 9, 2009, and applicable to applications for emergency mortgage assistance filed on and after July 1, 2008, effective July 9, 2009; June 12 Sp. Sess. P.A. 12-1 amended Subsec. (a) to prohibit payments from being made after 60 months have passed since date of initial payment, effective June 15, 2012; P.A. 21-44 replaced mortgagor with homeowner in Subsecs. (a) to (f), and P.A. 21-44, S. 11, added editorially by the Revisors as Subsecs. (g) to (i), added requirements re emergency lien assistance payments by the authority to the lienholder, loans by the authority to the homeowner, and right of lienholder to foreclose respectively and made technical and conforming changes; P.A. 24-66 amended Subsec. (a) to replace reference to monthly payments with provisions re payments being in form determined at discretion of authority, replace provision re payments being made for period not to exceed 60 months with provision re payments being made in total amount not to exceed 60 months of payments including initial disbursement, and add provision re initial payment including sum to reduce principal balance of mortgage if approved by authority, amended Subsec. (b) to redesignate existing provisions re amount of payments by homeowners as Subdiv. (1), replace “will cause the homeowner's total housing expense” with “shall cause the homeowner's total housing expense”, replace “less than or equal to thirty-five” with “not greater than forty-five”, add Subdiv. (2) re calculation of payments by homeowners using ratio of homeowner's total housing expense to aggregate family income, amended Subsec. (c) to replace “shall be subject” with “may be subject”, add reference to “if any”, amended Subsec. (d) to add provision re payments being discontinued when maximum amount of payments has been provided and replace provision re payments being discontinued when period of eligibility has expired with provision re payments being discontinued when period during which payments were provided has expired, amended Subsec. (e) to add Subdiv. (1) re authority advancing payments to mortgagee if homeowner fails to pay authority certain amounts due, redesignate existing provisions re authority reviewing homeowner's financial circumstances as Subdiv. (2) and insert provision therein re authority reviewing homeowner's financial circumstances upon homeowner's request, replace “If the delinquency is not the result” with “If the homeowner does not demonstrate to the satisfaction of the authority that the delinquency is the result” and change “shall terminate” to “may terminate” and made technical and conforming changes.