Latest News…July 6, 2020

Condos and Healthy Homes Funds

CFSIC’s claim disbursement process is pretty easy to understand.

It hasn’t changed since the inception of the program. We have posted numerous postings explaining how it works. We have described the process to hundreds of homeowners in phone calls and emails. The 157 families who are back in their homes understand how the payment process works, because they’ve lived through it, and we have their “thank you” notes to prove it, because the way foundations have been paid for and replaced has been fair and objective at all times.

CFSIC’s staff is dismayed to read social media postings that hint strongly at the possibility that CFSIC is favoring single-family homeowners over condo units, and that somehow the claim disbursement process is corrupt. They are demoralized to read comments that are misinformed. These staff members are the people who manage the day-to-day aspects of homeowner claims and deal with distraught victims of this crisis every day of the week.

Our claims adjustment staff are our first responders to the crumbling foundations crisis, and they deserve our respect.

For CFSIC to make any payment for a foundation claim from the funds it holds, a Participation Agreement must be entered into between a homeowner and CFSIC.

For CFSIC to make any payment for a condo foundation claim from the funds it holds, a Participation Agreement must be entered into between the condo association and CFSIC.

With respect to foundation remediations (Type 1 claims) Participation Agreements have been entered into, so far, 292 times since the program began…that’s 292 families for whom we have approved construction and, at a minimum, made construction deposits…and in 157 of those cases, we have restored that home to its family with a finished foundation.

A Participation Agreement cannot be entered into without a signed and approved construction contract. That’s 292 approved and signed construction contracts so far that have preceded the signing of 292 PAs.

There are many dates to keep track of in the CFSIC program with regard to Type 1 claimants: the date you applied (or, if you are a condo unit owner, the date your association applied on your behalf)…then there’s the date your claim became active (or, in the case of condos, the association became active as a claimant)…then there’s the final date and the most important date: the date on which your claim moved into line to receive a Participation Agreement because, and only because, you signed (or your association signed on your behalf) a construction contract.

If the period of time between when your claim became active, and when you got your minimum of two contractor proposals and provided them to ESIS ProClaim for review and final approval, and you then actually entered into one of those construction contracts…is a month or two…then the movement of your claim into line for a Participation Agreement and eventual funding (whenever we get money) can be very rapid.

On the other hand, if the space of time between the date on which your individual claim became active (or a condo association’s claim became active) and the date on which you (or your association) actually signed a construction contract took, as it has in some cases, more than seven months for condos…then it should not be a surprise that the Participation Agreement line got longer during those seven months in question…and you’ve been pushed further down the line for financial assistance as a result.

We do not fault condo associations for the time it has taken to get construction contracts signed, enabling those associations to get in line for a PA.

There are board meetings to consider; there are condo unit assessments to consider; there’s the possibility of a loan or multiple loans to consider; and of course there can be a lot of dissention and debate among associations and their members, where consensus must be reached before entering into a construction contract. We understand it; we sympathize with it; but most importantly we recognize, as should everyone, the reality of it.

Given this, the fact that we actually have any condo associations in line at all for PAs is a testament to how well condo associations actually function and the strength of their management companies. We are delighted to have condo associations in line for funding. They have worked hard to get there. But to be clear, they are not in line for funding in a date order based on the dates of their original applications or the dates that they subsequently became active claimants…they are only in line for PAs based on the date we have approved and signed construction contracts.

Anyone doubting this, or questioning it, or who believes that some sort of conspiracy exists to hold back condos, should call the Superintendent’s office at 860-487-0000, and ask to speak directly to the Superintendent.

We ask you to do that rather than post comments on social media. Social media is not necessarily the place to find the truth.

All we ask is that, if you do call, you actually be a claimant or an association who has made a claim. We can then discuss the specifics of your claim with you. We cannot and will not divulge personal claimant information to anyone except a claimant, and that’s going to be our position as long as the current Superintendent is running CFSIC. We’ll tell you everything we know.

If CFSIC were not transparent in its operations, our audit wouldn’t be publicly posted…and it is… and it is about to be again in September 2020.

Five condominium associations are currently in line for funding and eventually to receive Participation Agreements. There are only five in line. There are other associations who are not yet in line. Why?…because they haven’t submitted signed construction contracts for approval. You can’t get in line for a PA unless you do.

We are very happy to see these first five. These first five know who they are. We have dealt with their boards and/or management firms on multiple occasions. We have not received a single complaint from them about where they are in line for funding for the simple reason that they know where they are in line for funding because we’ve told them. None of these associations at the board or management company level believes that some conspiracy exists to hold them back.

The reason that no condominiums can be funded from the $10.6M we have just received from the Healthy Homes surcharge is that we have homeowners already in line for remediation (and, no, we are not talking about Type 2s or Legacy claimants) who are severity coded 3 and have been in line waiting for funding since the middle of September 2019.

The earliest condo association in the Participation Agreement line has been in line and is dated and time stamped effective December 18, 2019 at 8:52 AM. That’s the first condo association that will receive assistance. That association knows exactly where they are in line.

Some people would like us to put condos ahead of homeowners who have been waiting since September. It’s not going to happen on our watch. CFSIC is not in the business of re-victimizing victims.

With the Healthy Homes funds we have received, we are going to methodically get through at least 65 claimants with signed construction contracts, who have been in line since the middle of September. None of these homeowners will be condo unit owners or their associations.

We will commit Healthy Homes funds over the next three weeks through the signing of PAs with homeowners already in line with signed construction contracts, who have been in line a long time, and the $10.6M (for which we are grateful) will still only get us as far as November 22 in that line.

In other words, the gap in line for a PA between 11/22 and 12/18, when the first condo is eligible for funding, can only be addressed when we get our next $20 million from the CT Bond Commission.

Here’s what CFSIC has done to smooth the way for condos:

– advocated strongly through our Board of Directors to change the enabling legislation (which CFSIC didn’t write to begin with) to remove the restriction on condo buildings with more than four units;

– we raised the cap on condos to give greater assistance;

– we removed the prohibition of no assistance given if the unit is bank or investor-owned, subject to reasonable conditions;

– we modified our application process to make it a two-step process for condos…so that associations could apply for buildings that contain four or fewer units ahead of the legislation changing, so they could follow-up and catch-up after the legislation changed, thus helping to put them in line faster.

The record speaks for itself.

Right now, CFSIC has been engaged for many hours with the CT Bankers Association and CHFA to make certain that the legislation gets changed to include an equitable disbursement of loan funds per building for eligible condos.

When our staff reads certain comments on social media, they are rightfully dismayed to read criticisms that are aimed at their integrity as professionals. Challenging a person’s integrity publicly and suggesting that a conspiracy is lurking around the corner doesn’t fix foundations and doesn’t put families back on a firm footing.

Transferring Your Claim

All CFSIC claimants (not just active claimants) will be able to transfer their existing inactive or Pending claims to a buyer of their home effective July 13, 2020, retroactive to June 1, 2020. Today, we are publishing on this site the following:

– red-marked changes to CFSIC’s Underwriting and Claims Management Guidelines;

– a new subsection, subsection 20, in the “For Homeowners” section of this site, which will detail how the process will work, inclusive of Q&A;

– a templated Claim Transfer Agreement governing the transfer of a claim in the “For Homeowners” section;

– a new subsection, subsection 11, in the “For Contractors” section of this site, providing claim transfer information for contractors.

What follows is an expanded (expanded from last week) Q&A about this important change.

Question: I’m a Type 1, severity Class 2, inactive claimant. If I sell my home and transfer my claim to the buyer, does that change the status of my claim?

Answer: No. The buyer gets the exact status you had at the moment of transfer.

Question: I’m in line for a Participation Agreement and have been in line for a while. I’ve been told that I may be in the next round of funding at some point after July 1, 2020, but I still plan to sell my house and give up my claim. Does my exact place in line for a Participation Agreement get transferred to the buyer?

Answer: Yes, if the buyer agrees to all terms and conditions of the Claim Transfer Agreement.

Question: Where can I find a sample of the Claim Transfer Agreement on this site?

Answer: View a sample of the Claim Transfer Agreement here (PDF)

Question: I’m a Pending claimant, and I’m aware that, given current anticipated projected funding, I may never get my claim paid unless CFSIC gets more money. If I transfer my claim because I sell my home, will the buyer be taking the same risk I am?

Answer: Absolutely. We may never have enough money to address Pending claimants.

Question: Can I transfer my claim without selling my home?

Answer: No.

Question: Does this apply to condos? Does it apply to PUDs?

Answer: No for condos. (Remember that condo unit owners are technically not our claimants… associations are our claimants, because it is the association that owns the foundation.) It applies to PUDs.

Question: I’m a Type 2 claimant. Does it apply to my claim?

Answer: No.

Question: Once I transfer my Type 1 claim to the buyer, can he or she re-sell the home and transfer the claim again?

Answer: No. The transfer of a claim can occur only once…from one Original Claimant to one Transfer Claimant. It can never be transferred again by the Transfer Claimant.

Question: Will I be able to sell my home first and then transfer the claim at some point after that?

Answer: No. The Claim Transfer Agreement date can only be the same date as the date of the sale of the home or a date prior to the sale. It it’s prior to the date of sale, and for some reason the sale does not go through…then the transfer is voided as if it had never occurred.

Question: OK, but I sold my house in the middle of June…how will the retroactive June 1 date affect me?

Answer: As stated above, on and after July 13, 2020, the date of the Claim Transfer Agreement must be the date of the sale of the home or a date prior to the sale. It cannot, however, be a date prior to June 1, 2020. In your example, you would still qualify.

Question: So are you saying that if I sold my home on May 15, 2020, I’m disqualified?

Answer: Yes, that’s what we’re saying…besides, at the date of sale you ceased to be a CFSIC claimant anyway, and the correct thing to do would have been to notify ESIS of your status so that someone else could have access to your funds. We are grandfathering this process back to June 1 as an accommodation only.

Question: Are you still going to stop the Pending application process on June 30 as previously announced?

Answer: Yes. We have already done so.

Question: I’m a Type 1, severity Class 3 active claimant. So if I transfer my claim to the buyer of my home, what am I really doing?

Answer: Looks like you don’t have a Participation Agreement yet, based on the question. So, what you’re doing is transferring almost every right, obligation, and duty you had for your active claim to the buyer of your home, who then agrees to take over those rights, duties, and obligations.

Question: But I’ve got a signed contract and am in line for a Participation Agreement. What happens if the buyer and the contractor can’t agree on the terms of the original contract or, alternatively, the contractor simply backs out of the arrangement?

Answer: The buyer can seek the required two proposals for construction services from CRCOG-approved contractors to substitute for the original contractor, one of which will eventually substitute for the original contract. CFSIC will keep an active claim “active” for a period of 180 days from the date of the Claim Transfer Agreement in order to allow time for this to happen. If it isn’t accomplished by then, the claim is removed from our system, it is no longer active, and the buyer is no longer in line…and must therefore start the process all over again as if the claim had never transferred. If we are not accepting applications at the time that happens, then the buyer may have to wait for years to reapply, or may never get an opportunity.

Question: Who is responsible for contacting ESIS ProClaim to tell them about the sale of a home?

Answer: Only the original homeowner (Original Claimant). ESIS will not accept communications of any kind from real estate agents or from Transfer Claimants (home buyers) regarding a claim transfer.

Question: Okay…what happens then?

Answer: When you provide ESIS ProClaim with your claim number by phone or email and indicate that you want to transfer your claim to the buyer of your home, they will provide you with a Claim Transfer Data Form to complete. You will send it back to them completed. The Superintendent’s office will then contact you and send you a Claim Transfer Agreement, which will require your signature and that of the buyer, as well as separate witnesses. You will return the fully-executed Claim Transfer Agreement back to the Superintendent’s office. Once this agreement is fully executed and received in the Superintendent’s office, the transfer of the claim can occur, and the permanent records of the claim are changed with regard to who the claimant is.

Question: I’ve already signed a proposal with a contractor. Who is responsible for telling the contractor that I’m selling my home?

Answer: You are. It is not ESIS ProClaim’s responsibility or CFSIC’s responsibility to do this. It also cannot be the real estate agent or the homebuyer. If you want to transfer your claim, you have to do this yourself.

Question: What will CFSIC accept as evidence that the Original Claimant has transferred the home to the Transfer Claimant?

Answer: A copy of the recorded deed.

Question: But I have a CHFA loan agreement that I’ve just entered into. What happens to that?

Answer: You have to address that with CHFA.

Question: My contractor started work on my foundation last week. Can I still transfer my claim?

Answer: No. Once work starts on your foundation, you have to see it through, or you terminate your construction contract. We cannot permit a claim to transfer if even the most preliminary part of the remediation process has begun.

The CHFA Credit Enhancements Program

You should go here to learn more about the CHFA credit enhancements program as it is now constituted. Please note that it currently does not apply to condominiums. CFSIC did not create and is not administering the loan program, and the ESIS claim team cannot advise you in any way about the terms and conditions of any aspect of the program. The link noted in this section will take you to an outline of the program, as well as to a section marked “Frequently Asked Questions.” We also recommend contacting the Homeowner Advocate using the contact information on the Department of Housing website for more assistance.

CFSIC’s Annual Report

CFSIC’s Annual Report can be viewed here. 

CFSIC’s 2019 Audited Financial

View CFSIC’s audited financial report for the period ended June 30, 2019.

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If you have any questions about the operation of the program, ESIS is your best source of information on your claim, and their phone number and email are shown below.

Phone: 844-763-1207

Email: cfsic@esis.com

As you work through the information and application process (understanding that we are in suspension for the taking of new applications), here’s how you can get help:

– Call ESIS (the claim adjuster) at: 844-763-1207

– Email ESIS at: cfsic@esis.com

– Email CFSIC at: info@crumblingfoundations.org

To view a video of how to complete an electronic application, go here.

To apply for a Type 1 claim, go here.

To apply for a Type 2 claim, go here.

To learn more about the program, if you are a homeowner, including application help, go here.

To learn more about the program, if you are a contractor, go here.