Although areas like Las Vegas are seeing large amounts of foreclosures, Connecticut ranked 13th out of 50 states for foreclosure filings. According to the Connecticut Tribuna, the state has a handful of positive conditions that prevent large amounts of foreclosure filings: high income stability, reasonable property values, and low interest rates. Although the state ranks 30th for mortgage delinquencies, only 0.97 percent of all loans are foreclosure filings.

Part of this trend can be attributed to Connecticut Attorney General George Jepson, who has a goal of reforming the mortgage foreclosure process. While Connecticut foreclosures are either strict or by sale, Jepson doesn’t want to change the filing process itself; rather, he is addressing how large banks are handling foreclosure filings and loan modification programs. Robo-signing has been an issue with larger banks, but although this illegal practice has supposedly been eliminated, the processes for foreclosure filing and loan modification are still murky. Jepson told the Tribuna:

“The national banks that service residential mortgage loans – including Wells Fargo, Ally Financial, JP Morgan Chase, Bank of America and Citibank – have repeatedly violated state law by failing to treat financially distressed homeowners fairly and honestly. […] Any settlement will have to include substantial bank assistance for foreclosure relief programs and other programs to help distressed homeowners stay in their homes where possible and responsible to do so – a result that is compassionate to families and beneficial to the larger economy.”

Jepson is presently negotiating with banks. Ideally, he mentioned to the newspaper, large banks would have billions of dollars set aside for loan modification, rather than taking time with paperwork.

If you have filed for foreclosure or loan modification with a large bank, in Connecticut or another state, what was your experience? How was your file handled? Do you agree with Jepson that reform is needed for these processes?

Although 2011 was predicted to have the greatest number of foreclosures nationally, the second quarter showed decreases compared to a year ago; Connecticut’s real estate market reflects this trend. Foreclosure filings are down 51 percent compared to a year ago, according to Mansfield Patch, but this is only an overall state trend. Areas with lower job growth, such as the eastern region of the state, still have a greater number of foreclosures, although the amount decreased slightly since last year.

RealtyTrac analyst Daren Blomquist also mentioned that Connecticut’s figures may be artificially inflated as the result of long foreclosure procedures. Connecticut foreclosures use one of two procedures, but the process can take up to 551 days. While figures appear positive, foreclosure filing could increase in the state over the next six to 12 months.

Fairfield County Weekly reported on another foreclosure-related issue in the state – mold. Half of all foreclosed properties in the state could have mold, but buyers have no way of knowing, and agents are not obligated to disclose the condition.

What could be causing this issue? While foreclosures in poor condition are not restricted to Connecticut, such properties have the electricity and heat shut off and are essentially sealed. Moisture, from a leak, may get trapped inside the house, causing mold to accumulate and spread to wood and sheet rock. Mold testing costs $500 in the state, and replacing the infested materials, especially wood and rock, is an additional and significantly larger cost.

If you’re considering purchasing a foreclosure in the state, what should you look out for? First, understand that purchasing foreclosed property is a risk, not only for the mold but also for any additional damage from wear or lack of repair, and a buyer seldom sees the house beforehand. Agents, however, are required to disclose any basement, roof, or humidity problems, and depending upon the information given, you could infer any potential mold issues inside the home.

Foreclosures are expected to increase nationally in 2011, but Connecticut is one of the states where rates are going down. The Norwich Bulletin reports that the number of foreclosed properties has fallen 62 percent over the past year and 25 percent since December 2010. Connecticut ranks 39th out of 50 states for foreclosures on the market.

Connecticut foreclosures are still prevalent in many areas, and not only in cities like Hartford and Bridgeport. Windham County, in the eastern part of the state, has been considered the most troubled, with one in every 1,350 homes in foreclosure, according to the Bulletin. For those anticipating foreclosure, the state is offering classes for homeowners with difficulties. For real estate agents, foreclosures are still properties that can be sold, and in March, a CT REIA seminar will focus on rehabilitating and selling such homes.

Starting on February 17, classes for homeowners with mortgage difficulties or facing foreclosure are being held in the state. After this point, classes will be held on the third Wednesday of each month in a different location in Connecticut and are helpful for homeowners approaching the foreclosure process without legal representation.

CT REIA recently announced a seminar for real estate professionals interested in selling foreclosures. Held on March 5, the seminar will feature Robyn Thompson, a national lending expert who buys and renovates homes and sells them for larger profits, as the speaker. Thompson has rehabilitated more than 300 properties over the past 14 years and, in the seminar, will offer tips for fixing up properties, appreciation, and selling to a smaller pool of buyers.

Out of the “insider secrets” the CT REIA says Thompson will reveal include her strategy of “buy[ing] low and then rid[ing] the appreciation to the top.” Buying, rehabilitating, and appreciating is not a singular strategy, however, and as the economy is stagnant and the pool of homebuyers smaller, Thompson will address adjusting selling approaches for foreclosures.