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Governor Jodi Rell is proposing legislation that would put a six month hold on all foreclosures in the state.  Rell says she would like to see the bill taken up when the legislature meets in special session next week.

The proposal would mean a moratorium on all residential foreclosures – homeowners would continue to pay interest on their loans, and keep up with their taxes, but they would have breathing room to renegotiate the terms of their loan with their lender.  The bill would expand the state’s foreclosure mediation program, and make participation mandatory.  There would also be protection for renters whose landlords are in trouble – owners would have to notify tenants within seven days of a foreclosure filing.

It’s hoped the moratorium measure could help to mitigate the effects of resets on adjustable rate mortgages, many of which will head higher next year.  Legislators will meet Monday to discuss the state’s budget deficit – Rell says if there’s no action on the bill then, she’ll push for it to be passed first thing in January.