AN ACT CONCERNING THE EMERGENCY MORTGAGE ASSISTANCE PROGRAM.

Substitute Senate Bill No. 283

Public Act No. 24-66

AN ACT CONCERNING THE EMERGENCY MORTGAGE

ASSISTANCE PROGRAM.

Be it enacted by the Senate and House of Representatives in General

Assembly convened:

Section 1. Section 8-265cc of the general statutes is repealed and the

following is substituted in lieu thereof (Effective October 1, 2024):

As used in this section and sections 8-265dd to 8-265kk, inclusive, as

amended by this act:

(1) "Aggregate family income" means the total income of adult

persons residing in the same household as the homeowner and any

other adult resident of the household, [declared by the homeowner as a

dependent for federal tax purposes,] from whatever source derived,

including, but not limited to, pensions, annuities, retirement benefits

and Social Security benefits, provided the authority may exclude from

income (A) reasonable allowances for dependents; [,] (B) reasonable

allowances for medical expenses; [, (C) all or any part of the earnings of

gainfully employed minors or family members other than the chief

wage earner, (D)] (C) income not regularly received; [,] and [(E)] (D)

such other expenses as the authority may allow;

(2) "Authority" means the Connecticut Housing Finance Authority

created under section 8-244;

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(3) "Mortgage" means a mortgage deed or other instrument which

constitutes a first or second consensual lien, including a reverse

mortgage or a home equity conversion mortgage, on residential real

property;

(4) "Mortgagee" means the original lender under a mortgage, or its

agents, successors [,] or assigns;

(5) "Mortgagor" means a homeowner who is also the borrower under

a mortgage encumbering such real property;

(6) "Housing expense" means the sum of the homeowner's monthly

maintenance expense in a common interest community, [utility expense,

heating expense,] hazard insurance payment, taxes and required

mortgage payment, including escrows;

(7) "Financial hardship due to circumstances beyond the

homeowner's control" means a significant reduction of aggregate family

household income or increase in expenses which reasonably cannot be

or could not have been alleviated by the liquidation of assets by the

homeowner as determined by the Connecticut Housing Finance

Authority, including, but not limited to, a reduction resulting from (A)

(i) unemployment or underemployment of one or more of the

homeowners; (ii) a loss, reduction or delay in receipt of such federal,

state or municipal benefits as Social Security, supplemental security

income, public assistance and government pensions; (iii) a loss,

reduction or delay in receipt of such private benefits as pension,

disability, annuity or retirement benefits; (iv) divorce or a loss of

support payments; or (v) disability, illness or death of a homeowner; or

(B) (i) a significant increase in the dollar amount of the periodic

payments required by the mortgage; (ii) an unanticipated rise in

housing expenses; or (iii) expenses related to the disability, illness or

death of a member of the homeowner's family, but does not include

expenses related to the accumulation of credit or installment debt

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incurred for recreational or nonessential items prior to the occurrence of

the alleged circumstances beyond the homeowner's control; [in an

amount that would have caused the homeowner's total debt service to

exceed sixty per cent of aggregate family income at that time;]

(8) "Consumer credit counseling agency" means a nonprofit

corporation or governmental agency located in this state which has been

designated by the authority to provide homeowners' emergency

mortgage assistance program counseling. A qualified consumer credit

counseling agency must either be certified as a housing counseling

agency by the federal Department of Housing and Urban Development

or otherwise determined accepted by the authority;

(9) "Foreclosure mediation program" means the Ezequiel Santiago

Foreclosure Mediation Program established pursuant to section 49-31m;

(10) "Periodic payments" means principal, interest, taxes, insurance

and, if applicable, condominium fees;

(11) "Lien" means debt secured by a lien on residential real property

pursuant to section 7-239, 7-254, 7-258 or 47-258 or chapter 205;

(12) "Lienholder" means the original lienor of a lien, or its agents,

successors or assigns;

(13) "Homeowner" means the owner-occupant of residential real

property; and

(14) "Residential real property" means [a] one-to-four family owner-

occupied residential real estate located in this state, including, but not

limited to, a single-family unit in a common interest community.

Sec. 2. Section 8-265ff of the general statutes is repealed and the

following is substituted in lieu thereof (Effective October 1, 2024):

(a) (1) Any homeowner who is a mortgagor may apply for emergency

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mortgage assistance payments under sections 8-265cc to 8-265kk,

inclusive, as amended by this act, if (A) such homeowner (i) has received

notice of intent to foreclose as provided in section 8-265ee, (ii) is sixty

days or more delinquent on a mortgage, or (iii) anticipates that he or she

will be sixty days or more delinquent on a mortgage based on financial

hardship beyond such homeowner's control, provided the authority

determines that such homeowner will be so delinquent, or (B) the

homeowner's mortgage is in forbearance.

(2) Any homeowner may apply for emergency lien assistance

payments under sections 8-265cc to 8-265kk, inclusive, as amended by

this act, if such homeowner (A) has received notice of the lienholder's

intent to foreclose the lien, (B) is sixty days or more delinquent on the

debt secured by a lien, or (C) anticipates that he or she will be sixty days

or more delinquent on the debt secured by a lien based on financial

hardship beyond such homeowner's control, provided the authority

determines that such homeowner will be so delinquent.

(3) As part of the application process, the authority may refer the

applicant to a counseling agency approved by the United States

Department of Housing and Urban Development.

(b) If the homeowner applies for emergency mortgage or lien

assistance payments under sections 8-265cc to 8-265kk, inclusive, as

amended by this act, the authority shall, no later than eight business

days after the date of receipt of such application, notify all of the

mortgagees and lienholders listed on the application holding a

mortgage or lien on the homeowner's real property.

the authority. The homeowner shall complete and sign the application

subject to the penalty for false statement under section 53a-157b.

(d) The homeowner shall provide the authority with full disclosure

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of all assets and liabilities, whether singly or jointly held, and all

household income regardless of source. For purposes of this subsection,

both of the following are included as assets:

(1) The sum of the household's savings and checking accounts,

market value of stocks, bonds and other securities, other capital

investments, the value of any portion of pensions and retirement funds

[valued in an amount greater than] in excess of one hundred thousand

dollars, personal property and equity in real property including the

subject mortgage or lien property. Income derived from family assets

shall be considered as income. Equity is the difference between the

market value of the property and the total outstanding principal of any

loans secured by the property and other liens.

(2) Lump-sum additions to family assets such as inheritances, capital

gains, insurance payments included under health, accident, hazard or

workers' compensation policies and settlements, verdicts or awards for

personal or property losses or transfer of assets without consideration

within one year of the time of application. Pending claims for such items

must be identified by the homeowner as contingent assets.

(e) The authority shall make a determination of eligibility for

emergency mortgage or lien assistance payments by the date thirty

calendar days after the date the homeowner's application is received by

the authority. During said thirty-day period no judgment of strict

foreclosure or any judgment ordering foreclosure by sale shall be

entered in any action for the foreclosure of any mortgage or lien any

mortgagee or lienholder holds on the homeowner's real property. No

emergency mortgage or lien assistance payments may be provided

unless the authority finds that:

(1) The real property securing the mortgage or underlying the lien is

residential real property that is the principal residence of the

homeowner;

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(2) Payments, including amounts for taxes and insurance payments,

including mortgage insurance, or for charges, assessments and fees

associated with a condominium or common interest community, as such

terms are defined in section 47-202, or any combination of such

payments, whether or not such payments are made into escrow or

impound accounts as reserves, owed by the homeowner under any

mortgage or lien on such real property have been delinquent and the

mortgagee, taxing authority, unit owners association or lienholder has

indicated to the homeowner its intention to foreclose;

(3) The homeowner is a resident of this state and is suffering financial

hardship which renders the homeowner unable to correct the

delinquency or delinquencies within a reasonable time and make full

mortgage payments or payments on the debt secured by the lien. For the

purposes of subdivision (7) of this subsection, in order to determine

whether the financial hardship is due to circumstances beyond the

homeowner's control, the authority may consider information

regarding the homeowner's employment, credit history and current and

past household income, assets, total debt service, net worth, eligibility

for other types of assistance and any other criteria or related factors [it]

the authority deems necessary and relevant;

(4) There is a reasonable prospect that (A) a homeowner who applies

for emergency mortgage assistance payments will (i) be able to resume

full mortgage payments on the original, modified or refinanced

mortgage within sixty months after the [beginning of the period in]

monetary default for which emergency mortgage assistance payments

are provided in accordance with a written plan formulated or approved

by the authority and pay the mortgage in full in level monthly payments

of principal and interest, subject only to payment changes as provided

in the mortgage, by its maturity date, or (ii) have sufficient equity to

repay the mortgage and emergency mortgage assistance payments at

the end of the time period for which such assistance payments are

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provided, and (B) a homeowner who applies for emergency lien

assistance payments will be able to bring the debt underlying the lien

current and resume regular payments to the lienholder for the tax,

water, assessment or usage charges underlying the lien after payment

by the authority of emergency lien assistance payments;

(5) The homeowner has applied to the authority for emergency

mortgage or lien assistance payments on an application form prescribed

by the authority which includes a financial statement disclosing all

assets and liabilities of the homeowner, whether singly or jointly held,

and all household income regardless of source;

(6) Based on the financial statement, the homeowner has insufficient

household income or net worth to correct the delinquency or

delinquencies within a reasonable period of time and make full

mortgage payments or regular payments to the lienholder for the tax,

water, assessment or usage charges underlying the lien;

(7) There is a reasonable prospect that the homeowner, as determined

by the authority, will be able to repay the emergency mortgage or lien

assistance [within a reasonable amount of time] under the terms of

section 8-265hh, as amended by this act, including through a refinancing

of the mortgage, and the authority finds that, except for the current

delinquency, any homeowner who is a mortgagor has had a favorable

residential mortgage credit history for the previous two years or period

of ownership, whichever is less. For the purposes of this subdivision, if

a homeowner has been more than thirty days in arrears four or more

times on a residential mortgage within the previous year, the

homeowner shall be ineligible for emergency mortgage assistance

payments unless the homeowner can demonstrate that the prior

delinquency was the result of financial hardship due to circumstances

beyond the homeowner's control. In making a determination under this

subsection, the authority may consider information regarding the

structure of the mortgage, its repayment schedule, the length of time the

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homeowner has lived in his or her home, and any other relevant factors

or criteria it deems appropriate;

(8) The mortgagee or lienholder is not otherwise prevented by law

from foreclosing upon the mortgage;

(9) The homeowner has not mortgaged the real property for

commercial or business purposes;

(10) The homeowner has not previously received emergency

mortgage or lien assistance payments from the authority, except that (A)

a homeowner who has previously received mortgage assistance

payments shall be eligible to reapply for mortgage assistance if the

homeowner has reinstated the mortgage and the homeowner is not

delinquent for at least six consecutive months immediately following

such reinstatement, and (B) a homeowner who has previously received

lien assistance payments shall be eligible to reapply for lien assistance if

the homeowner has brought the debt underlying the lien current and

the homeowner is not delinquent on regular payments to the lienholder

for the tax, water, assessment or usage charges underlying the lien for

eighteen consecutive months immediately following the date such debt

is made current;

(11) The homeowner is not in default under the mortgage except for

the monetary delinquency referred to in subdivision (2) of this

subsection; and

(12) The homeowner meets such other procedural requirements as

the authority may establish, provided the authority shall not prohibit a

homeowner from participating in the program solely on the basis that

the homeowner received a discharge of debt through a bankruptcy

filing and did not reaffirm such debt.

Sec. 3. Subsections (a) to (e), inclusive, of section 8-265gg of the

general statutes are repealed and the following is substituted in lieu

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thereof (Effective October 1, 2024):

(a) If the authority approves a homeowner for mortgage assistance

under the provisions of section 8-265ff, as amended by this act, the

authority shall make [monthly] 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 [for a period not to exceed] 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, [and pays]

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

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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: [in] (1) In an amount which [will]

shall cause the homeowner's total housing expense to be [less than or

equal to thirty-five] 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.

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 [shall]

may be subject to repayment with interest, if any, and secured as

provided in section 8-265hh, as amended by this act.

(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.

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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, as amended by this act, the maximum amount of

emergency mortgage assistance payments allowed under subsection (a)

of this section has been provided or the sixty-month period [of eligibility

for such payments under subsection (e) of section 8-265ff] established

under subsection (a) of this section, during which one or more

emergency mortgage assistance payments were provided, has expired,

whichever is sooner. [, and a] 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,

as amended by this act. 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 [not] the result of additional financial hardship due to circumstances

beyond the homeowner's control in the homeowner's financial

circumstances, the authority [shall] 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, as amended

by this act. If the delinquency is the result of a change in the

homeowner's financial circumstances, the authority may modify the

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homeowner's required monthly payments to the authority.

Sec. 4. Section 8-265hh of the general statutes is repealed and the

following is substituted in lieu thereof (Effective October 1, 2024):

(a) Upon approval of emergency mortgage or lien assistance

payments, the authority shall enter into an agreement with the

homeowner for repayment of all such assistance with any interest as

provided in this section. The agreement shall provide for [monthly

payments] repayment by the homeowner after emergency mortgage or

lien assistance payments have ended and shall be subject to the

following provisions:

(1) [If the homeowner's total housing expense, including projected

repayments for assistance under this section, is greater than thirty-five

per cent of the homeowner's aggregate family income, repayment]

Repayment of the emergency mortgage or lien assistance payments

shall be deferred until [such total housing expense, including projected

repayments for assistance under this section, is less than or equal to

thirty-five per cent of such aggregate family income;] the homeowner

(A) transfers title to the homeowner's residential real property, other

than a transfer to another mortgagor under the same mortgage pursuant

to a dissolution of marriage or by devise, descent or operation of law

upon the death of a homeowner, (B) ceases to occupy the residential real

property as a principal dwelling, or (C) obtains new mortgage loan

financing, other than home improvement mortgage loan financing for

repairs necessary to preserve the residential real property, which

increases the amount of mortgage debt to an amount that is more than

the amount of mortgage debt that encumbered the residential real

property at the time when emergency mortgage or lien assistance

payments were initially approved under section 8-265ff, as amended by

this act; and

[(2) If repayment of emergency mortgage or lien assistance payments

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is not made by the date the mortgage is paid in full, the homeowner

shall make monthly payments to the authority in an amount not less

than the monthly mortgage or lien payment until such assistance is

repaid;

(3) Interest shall accrue on all emergency mortgage and lien

assistance payments made by the authority at a rate based upon the cost

of funds to the state periodically determined by the State Treasurer in

consultation with the authority. Interest shall start to accrue whenever

the homeowner is required to commence repayment under this section.]

(2) (A) The authority may, at the discretion of the authority, elect to

enter into an agreement with the homeowner to provide that (i) interest

on emergency mortgage and lien assistance payments made by the

authority shall be payable from time to time or accrue, and (ii) if such

interest accrues, such interest will compound periodically or accrue as

simple interest.

(B) For any such interest that accrues, (i) the rate of accrual shall be

established by the authority in accordance with the authority's

procedures, and (ii) such interest shall start to accrue at the end of the

sixty-month period established under subsection (a) of section 8-265gg,

as amended by this act, during which one or more emergency mortgage

assistance payments were provided.

(b) Repayment of amounts owed to the authority from a homeowner

under the provisions of sections 8-265cc to 8-265kk, inclusive, as

amended by this act, shall be secured by a mortgage on the

homeowner's real property, provided said mortgage shall not be

deemed to take priority over any other mortgage or lien in effect against

such property on the date the emergency mortgage is recorded. The

authority may allow subordination of its mortgage if such

subordination is required to permit the homeowner to obtain a home

improvement loan for repairs necessary to preserve the property.

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discretion of the authority, waive any right of the authority to conduct

periodic review of the homeowner's financial circumstances to

determine the amounts of repayment required under this section.

(d) All moneys received by the authority from homeowners for

repayment of emergency mortgage or lien assistance payments shall be

paid to the authority, deposited in such funds or accounts as the

authority may establish from time to time for such purpose and be used

solely for the purposes of the program established pursuant to sections

8-265cc to 8-265kk, inclusive, as amended by this act.

(e) Any homeowner who misrepresents any financial or other

pertinent information in conjunction with the filing of an application for

emergency mortgage or lien assistance or modification of such

assistance, may, at the discretion of the authority, be denied assistance

and required to immediately repay, either in a lump sum or in

installments, any amount of assistance already made together with

interest at the maximum per annum rate allowed under section 37-4.

The mortgagee or lienholder may, at any time thereafter, take any legal

action to enforce the mortgage or lien without further restrictions or

requirements.

(f) The authority may take any action it deems appropriate to recover

emergency mortgage or lien assistance when the homeowner fails to

repay such assistance under the terms and conditions established under

this section.

Sec. 5. Section 8-265ii of the general statutes is repealed and the

following is substituted in lieu thereof (Effective October 1, 2024):

(a) The Connecticut Housing Finance Authority shall adopt

procedures in accordance with section 1-121 to implement the

provisions of sections 8-265cc to 8-265hh, inclusive, as amended by this

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act. Such procedures shall include the establishment of a process for

notification to eligible homeowners of the availability of funds under

sections 8-265cc to 8-265kk, inclusive, as amended by this act, and for

notification to the mortgagee or lienholder that an application has been

received by or on behalf of the homeowner and of the authority's

determination of eligibility.

(b) The authority may, from time to time, adopt procedures in

accordance with section 1-121 to establish an aggregate limit on the

amount of emergency mortgage assistance payments that a homeowner

may receive under sections 8-265cc to 8-265kk, inclusive, as amended by

this act.

Sec. 6. Subsection (b) of section 8-265kk of the general statutes is

repealed and the following is substituted in lieu thereof (Effective October

1, 2024):

(b) If funds are not available to provide emergency mortgage or lien

assistance payments to homeowners in accordance with sections 8-265cc

to 8-265kk, inclusive, as amended by this act, the authority shall [notify]

post on the authority's Internet web site a notice for the benefit of all

mortgagees and lienholders and shall [not accept] thereafter discontinue

accepting applications for emergency mortgage or lien assistance

payment. Upon [receipt of] posting such notice, [from the authority] and

until [mortgagees and lienholders receive a further] a subsequent notice

[from] is posted by the authority on the authority's Internet web site

disclosing that such funds are again available and applications for such

assistance payments are again being accepted by the authority, [:] (1)

[Mortgagees] mortgagees may commence foreclosure actions without

first providing the notice set forth in subsection (a) of section 8-265ee, [;]

and (2) the foreclosure of mortgages and liens by mortgagees or

lienholders may continue without any further restriction or requirement

under the provisions of sections 8-265cc to 8-265kk, inclusive, as

amended by this act.

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Approved May 28, 2024