CT SEEKS TITLE CLEARANCE IN FORECLOSURE CASES

Mar 12, 2011

COMBO TITLE AND SECURITIZATION SEARCH, REPORT, ANALYSIS ON LUMINAQ

EDITOR’S COMMENT: All they are seeking to do is restate the obvious — that if the foreclosure is not done properly, title will never be clear — a point that we have been making for three years here. It is a very hot issue since the title companies are at maximum risk here and might be accused of bad faith in writing the policy when they knew about the securitization scheme and didn’t protect the beneficiary of the policy – not to speak of the tremendous liability that is brewing in millions of of other transactions and foreclosures.

The Connecticut Bill seeks to make that perfectly clear and places the burden where it should be — on the would-be forecloser, to assure that they are the correct party initiating the foreclosure and that a “credit bid” is not entered in lieu of cash at the auction by a party who is not the creditor.

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Connecticut SB 1074 | Sen Musto Seeks to Change Title Rules in Foreclosure Cases, Force Banks to Perfect their Legal Right Before Foreclosure Action

Today, March 11, 2011, 37 minutes ago | Foreclosure Fraud

Musto Seeks to Change Title Rules in Foreclosure Cases

Proposal would level playing field between banks and homeowners

Amidst national reports of shoddy paperwork processing that led to suspended foreclosure proceedings at many major lenders, state Senator Anthony Musto (D-Trumbull) is pushing legislation that would require banks to perfect their legal right to property before they can file a foreclosure action.

Under current state law, banks and other lenders are exempt from recording their mortgage assignments, and thus securing their rights to the mortgage, before foreclosing on property—in contrast to individuals, who must properly record such things as deeds, liens and easements in public land records to make them effective.

“Our law treats banks, mortgage holders and other lending institutions different from everyone else,” said Senator Musto, who testified in support of the bill before the General Assembly’s Judiciary Committee this past Friday. “With recent fraudulent document scandals involving some of the countries biggest mortgage lenders, and with a foreclosure crisis planted at the root of our continuing economic troubles, it makes no sense to allow banks to skip a step required by everyone else to secure an interest in the land. This bill will remove an unreasonable exemption and provide an additional layer of security for homeowners. Banks simply need to play by the same set of rules everyone else uses.”

Formally, the bill would repeal Section 47-17 of the Connecticut General Statutes. The legislation—Senate Bill 1074, An Act Concerning Foreclosure When Legal Title Has Not Been Conveyed—currently waits for action from the Judiciary Committee.

The 2011 legislative session adjourns on June 8.

Senator Anthony Musto represents Bridgeport, Trumbull and Monroe in the state Senate, where he serves as chair of the Human Services Committee.

SOURCE: State Senator Anthony Musto

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