Some Peace of Mind This December

The holidays are here, the end of the year is looming large, for many it’s time to tidy things up before 2019 rolls in and things get going again. Over the last few weeks I’ve written about Lodge 49 and the fact debt (of every kind) is so prevalent on the show, it’s another character; and I relayed happy news about settling judgments and liens for clients looking at foreclosure.

Everyone, I think, can identify with the residents of Long Beach in Lodge 49, beset at every turn by debt, plunging home prices (the area just became a superfund site), foreclosures, and more. Everyone, I think, can vicariously enjoy hearing about a judgement and/or lien being settled in the borrower’s favor.

But, in my experience, that doesn’t translate – often enough, at least –  to the many, many, people out there with the same problems I write about getting – really getting – that there are solutions for them. In many cases, several solutions.

Everyone can be LIz, the Lodge 49 character who walked into her bank and took care of her debt problem forever . . . the only thing you need to get started is to understand you have options.

Liz figured it out in the season finale.

Well, December is our season finale and the time to get some peace of mind, probably the commodity I deal in the most.

It’s simple, if you are looking a a possible foreclosure, have judgments and liens that threaten your home and/or continued financial health, are facing a crippling crumbling foundation situation, are in foreclosure and are scared … or baffled … or confused …

. . . come and talk to me.

Give yourself a consult for Christmas and give yourself some peace of mind. The one thing I can tell you sight unseen, you have no idea how many options you have.

Foreseeing Effects

First semester of law school everyone takes Torts. It’s an interesting course, rarely boring as you’re reading about some pretty gruesome medical malpractices, product liabilities, personal injuries.

An important concept in tort law is ‘reasonable foreseeability.’ Basically -very basically – it boils down to ‘was it reasonably foreseeable that not having your two-ton truck’s squealing, grinding breaks fixed might eventually result in losing them coming down a steep hill and getting into an accident?

I thought of this earlier this week when I noticed a comment on the Facebook page. We had posted a whiteboard cartoon explaining the crumbling foundation crisis in Eastern Connecticut. The caption mentioned that HUD Secretary Ben Carson had just toured a home with a crumbling foundation and had promised some federal relief. The comment was brief and to the point: ‘Another thing to bail out, I’m sick of this state.’

I get this viewpoint, I really do – I pay taxes in Connecticut, too. And, I wish it were that simple. But, of course, it is not. Because while this crisis – and it is a crisis – snuck up on us over more than a decade, it’s effects – from here on – are most certainly foreseeable.

First, 34,000 homes in 41 towns in Eastern Connecticut may be affected. Homeowners insurance will not cover the condition, banks and mortgage companies have no solutions, the costs of repairs – if at all feasible – are usually prohibitive. Government resources and funds are needed.

To take a complicated situation and greatly simplify, it goes like this -dozens of homes in a small town have crumbling basements:

Instantly they lose whatever equity the homeowners have built up over the years;

The homeowners cannot, obviously, refinance or obtain a home equity loan to fix the problem – if it is fixable;

The house cannot be sold;

The tax assessment by the town drops like a rock;

The more houses – and, remember, there are 34,000 homes that may have this problem – a town has with the problem, the more it’s tax base drops;

The more the town’s tax base drops, the more cutbacks to services, the more cutbacks to schools;

Cutbacks in services and schools inevitably mean lower rankings for livability and schools;

The lower the rankings, especially for schools, the lower the desirability for new homebuyers;

The fewer new home buyers, the lower the assessments;

And we start all over again;

Except, by now, since this effects 41 towns, the consequences are seen on a statewide basis, as about one-third of the state can no longer contribute much to Connecticut’s already hurting economy.

If we don’t come up with solutions to this problem – wide ranging, creative solutions – the effects are all too foreseeable and they will be felt by everyone.

About Crumbling Foundations

There was a meeting this past Saturday I wanted to let you know about…

The Connecticut Coalition Against Crumbling Basements held an open meeting at Ellington High School this past Saturday to discuss the funds allocated in the State budget for assistance with crumbling foundations and other updates.

The news everyone wanted to discuss was the $100 million that has been allocated for repairs, replacement and testing over the next five years. The questions were along the lines of “How much will I get to fix my foundation?” and “Can I be reimbursed for the costs of testing my foundation?”

The Legislature has essentially created its own insurance company (“captive” insurance, the are calling it) to make sure the funds are used properly. A board of directors of this “company” will be formed and it will be a non-profit entity.

Homeowners can apply to be reimbursed for some costs of testing from a fund out of the State budget money, and others can apply to have their testing paid for. Email me for the information on that- I picked up an info sheet at the meeting.

Other updates include progress by Representative Joe Courtney on reinstatement of the income tax exclusion for waiver of debt from a primary residence foreclosure, so that homeowners who have been foreclosed on or who have “walked away” from their homes, and owe more on their mortgage balances than their homes are worth will not also have to pay income tax on the amount that is “waived” or written off by their mortgage companies. This is an important piece of the puzzle because in the case of many families I’ve spoken to, homeowners are not willing to wait for funds to come through for replacement, or will not be able to afford the other costs associated with repair or replacement. In their cases because of the condition of their foundation, they will likely owe more on their mortgage than their homes are worth and so in addition to having lost any equity they had in their property, if they walk away, they do not want to also owe a debt to their mortgage company or a debt to the IRS. He is also pushing for tax deductions for the cost of any repairs performed. Rep. Courtney hopes to have an update on these issues by December and as soon as I find out anything I will share it with you.

It was a hopeful meeting filled with thanks to the people who have kept the issue in the public eye and on the radar of our elected officials. I encourage you to follow the Connecticut Coalition Against Crumbling Basements on Facebook (click here) for continued updates and meeting notices.

US News and World Report also covered the issue recently. To read that article, click here.

A big issue that remains is families not coming forward to report they have the problem. The idea is that if everyone who has the issue would speak up, everyone’s voices would be heard and more help may come faster. If you know anyone (friends, neighbors, family, co-workers, etc.), encourage them to come forward by contacting the Conn. Department of Consumer Protection directly or by clicking here.

Call me with any questions! Thanks and stay in touch.