Banking Committee
JOINT FAVORABLE REPORT
Bill No.: HB-5090
AN ACT CONCERNING MORTGAGE FORBEARANCE AND CRUMBLING
Title: CONCRETE FOUNDATIONS.
Vote Date: 2/23/2021
Vote Action: Joint Favorable Substitute
PH Date: 2/18/2021
File No.: 47
Disclaimer: The following JOINT FAVORABLE Report is prepared for the benefit of the
members of the General Assembly, solely for purposes of information, summarization and
explanation and does not represent the intent of the General Assembly or either chamber
thereof for any purpose.
SPONSORS OF BILL:
Banking Committee
Rep. Tom Delnicki
REASONS FOR BILL:
In the ongoing crumbling foundations saga, it became necessary to require new residential
mortgages - issued by Connecticut banks and credit unions - to grant forbearance for up to
120 days to borrowers who request it if they must leave their home while the homes
pyrrhotite-damaged (i.e., crumbling) concrete foundation is being repaired or replaced.
Forbearance begins when the borrower vacates the dwelling and ends 120 days later or
when the municipalitys building inspector issues a certificate of completion or occupancy,
whichever occurs first. It is designed to coincide with other similar programs. (passed on
Consent)
RESPONSE FROM ADMINISTRATION/AGENCY:
None Expressed
NATURE AND SOURCES OF SUPPORT:
Several residents/homeowners who own homes with crumbling foundations testified or
submitted testimony in support of this bill. They all stated that the ability to get forbearance
for the time that they must move out of the home and pay for another place to live would be
an amazing help during this difficult time.
Lisa A. Burns
Alyson Dettore Vernon
Diane and Paul Glohosky Vernon
Diane Lux Vernon
Debra MacCoy Vernon
Rahael and Maria Paxi South Windsor
Mary Gretchen Shea Vernon
Don Waterfield Tolland
Jeff Gentes CT Fair Housing Center in support of the bill but urges us to consider
including the New Jersey model which includes all banks (not just CT Banks and Credit
Unions) He testified that to date NJ's law has not faced any legal challenge. This model
would provide help to homeowners now, rather than future homeowners and would treat all
mortgage lenders equally.
Sarah Poriss, Esq. Attorney who works exclusively with clients who are in foreclosure.
In support of the bill "Since homeowners with a crumbling foundation and mortgage have
already lost all of their equity, a four-month forbearance will allow the homeowner to save
those payments so at least they recoup some benefit of their bargain under their mortgage
loan contract.
NATURE AND SOURCES OF OPPOSITION:
Tom Mongello, Art Corey CT Bankers Association Made 3 points: 1. This bill would
only apply to CT chartered banks which would create an uneven playing field. 2. The
programs being administered by CFSIC and CHFA are doing a good job at relieving much of
the economic hardship experience by many homeowners impacted 3. "We believe CT banks
should be able to work with borrowers to decide the best approach to resolving issues a
borrower may be having making payments. A mandate like the one proposed by this bill may
encourage borrowers to choose forbearance even though deferring payment may not be
financially appropriate for their individual situation."
Ralph H. Tulis, P.E.- Structures Consulting He is opposed in the current form. He isn't a
financial advisor so doesn't know the mortgage aspect of this, but as an engineer whose
primary focus has been this issue since 2010, he believes there is an issue with some of the
language. Specifically, the references to the Chief Building Inspector.
"However, the only situation where the chief building inspector (hereinafter Building Official)
will document that a dwellings foundation REQUIRES repair would be when it is readily
apparent that life safety is involved. I have examined well over 600 foundations since 2015
and can count on one hand the number where there MIGHT be a safety concern. In those
few cases a sudden, life threatening collapse is simply not going to occur, barring an extreme
external event such as a tornado or earthquake. A Building Official is NOT going to document
that repairs are required simply because some distress is apparent that may be attributable to
the presence of pyrrhotite. Based upon CFSICs requirement, that determination is made by a
licensed professional engineer OR a CFSIC-trained home inspector. Further, if it is the
Building Officials documentation that triggers forbearance, what good is that if no claim has
been filed and approved by CFSIC? I would suggest that the Committee seek some input
from the State Building Official before finalizing this language. I feel that sentence (2) should
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be eliminated from this bill, and that forbearance should be applicable ONLY after CFSIC has
accepted and approved a claim AND when the first payment is due to the approved
contractor."
Reported by: Dawn Marzik Date: 3/24/2021
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