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As Amended by Senate "A" (LCO 8529), House "A" (LCO 8735)

House Calendar No. : 700

Senate Calendar No. : 205

OFA Fiscal Note

State Impact:

Agency Affected


FY 10 $

FY 11 $

Judicial Dept.

BF - Cost

6. 4 million

1. 6 million

Banking Dept.

BF - Cost



Note: BF=Banking Fund

Municipal Impact: None


Sections 1 through 23 - The requirements of these sections can be achieved at a one-time cost to the Banking Fund of $100,000 for consulting and data conversion. An ongoing cost of $11,000 per year would occur for services provided by the Department of Information Technology.

Sections 27 through 33 expand eligibility requirements for the Connecticut Housing Finance Authority's (CHFA), a quasi-public agency, Emergency Mortgage Assistance Program (EMAP) and CT Families program. PA 08-176, “AAC Responsible Lending and Economic Security,” appropriated $14. 0 million from the Banking Fund to CHFA for EMAP, and specified that the CT Families program be undertaken with an initial amount of $40 million in CHFA bonds.

Any increase in the number of eligible applicants will result in additional expenditures of the existing program funding as provided by PA 08-176. As of 2/28/2009, CHFA approved 74 CT Families loans for a total of $14. 9 million. As of 3/12/2009, CHFA approved 18 EMAP loans that will provide a total of $11,270 in monthly assistance, totaling $135,240 for the next 12 months (homeowners must recertify each year). In addition to monthly assistance, EMAP pays mortgage arrearages to bring the homeowner's loan current. Twelve applicants will receive assistance totaling $140,354 to bring their loans current.

Sections 34 through 37 make the foreclosure mediation program established under PA 08-176 mandatory for any foreclosure action on residential real property with a return date between July 1, 2009 and June 30, 2010. This policy change would triple during that period the number of mediations conducted under current law, which makes such mediation contingent upon the filing of a request for mediation.

The bill does not alter the current law provision that closes the program to new participants on and after July 1, 2010. However, since the mediation deadline is 90 days after mediation begins, the cost of the bill would continue for three months into FY 11.

The annual, incremental cost of the bill's caseload increase is estimated to be $6. 4 million including salaries, fringe benefits and other expenses.

The bill provides that the cost of the program expansion shall be borne by the Banking Fund.

The fiscal impact of the bill would cease in FY 11, as indicated above, in accordance with the current law provision that effectively terminates the program on June 30, 2010.

Sections 24 through 26 and 38 through 43 make technical and conforming changes that have no fiscal impact.

House Amendment “A” strikes the language of the bill and has the fiscal impact indicated above.

The Out Years

The annualized ongoing $11,000 cost identified above for IT services would continue into the future subject to inflation.

The cost of the bill's provision that makes the foreclosure mediation mandatory would cease in FY 11, as indicated above, in accordance with the current law provision that effectively terminates the program on June 30, 2010.

Sources: CHFA staff report to Mortgage & Board of Directors, 3/19/200; Judicial Department Foreclosure Mediation Program Statistics as of 12/31/2008 included in the PowerPoint slideshow presented at the Banks Committee's 2/2/09 Informational Forum held on Foreclosure Mediation.