State Lawmaker To Push Legislation Requiring Banks To Record Chain Of Title Before Filing Connecticut Mortgage Foreclosure Actions

From the Office of Connecticut State Senator Anthony Musto:

• 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.”

For the press release, see Musto Seeks to Change Title Rules in Foreclosure Cases (Proposal would level playing field between banks and homeowners).