Are You Selling Your House?
As the real estate market begins to move forward, we think it is important to remind everyone of how CFSIC’s rules apply to an existing claimant if you are trying to sell your house.
First, CFSIC permits someone to take your place “in line” for claim assistance if you are selling a home where you as the homeowner are an active claimant.
Let us repeat that…
You have to be an active claimant. You cannot be an inactive claimant, and you cannot be a Pending claimant. You must be a claimant whose claim status has been determined as “active.”
If you’ve lost your paperwork, if you’re uncertain of your claim status, it’s important to reach out to your claim adjuster at ESIS, who can help you.
So if you are an active claimant and you decide to sell your home, here’s exactly what happens:
If you are an active claimant, you can represent to the buyer of your home that you hold “active” CFSIC status. When the transaction is complete, the buyer must contact ESIS, and you have to help them do it. You can’t walk away from this responsibility or shift it to the realtor. We don’t deal with intermediaries; we only deal with claimants. Be extremely careful: make sure you know that you truly hold “active” status. You do to want to leave yourself open to significant legal liability.
The buyer then assumes your exact place in line for assistance…meaning, the precise place in line your claim was in at the point at which you sold your home.
The buyer, once a Participation Agreement is issued on the home, must then also sign a letter of representation and warranty that they will own and live in the home they’ve purchased for a minimum of 365 days after a Certificate of Completion is provided on the foundation on that home. Why are we doing this?…CSFIC is not in the business of supporting the flipping of houses. We are in the business of restoring families to their homes and homes to the tax rolls.
Again, if you are an inactive claimant or Pending claimant, no one can take your place in line. That can only happen if your claim is active. Also, you cannot sell your home at any point in the middle of the construction process. Once construction begins, no one can take your place in line.
Lastly, you get one bite at the apple: if CFSIC has replaced your foundation in whole or in part, or if we have reimbursed you as a Type 2 claimant…you can never submit another claim to CFSIC, regardless of the circumstances. This rule enables us to help as many homeowners suffering through the crumbling foundations crisis as we can.
Another Message to Severity Class 2 Claimants
We have a total of 173 active claimants with Severity Class 2 foundations on our books.
We hold financial reserves on their claims right now on our books totaling $21.1 million.
Of this $21.1 million in reserves held, the amount we actually have in the bank to pay these claims is $0.
Many of those claims represent applications that go back to the earliest days of our operations; and we know that Severity Class 2 claimants want and need answers about when we can get to them, how long it’s going to take, and whether will we have the money to fund their claims.
CFSIC’s board is very keenly aware of all of the concerns of our Severity Class 2 claimants.
What’s important to know is that, if you are an active Severity Class 2 claimant in line for a Participation Agreement, we are not going to get to your Participation Agreement until sometime after July 1, 2021.
It doesn’t make any difference what day you originally applied…it is the date order in which you moved into line for a Participation Agreement that counts. (The date you originally applied…the date you become active as a claimant…and the date on which you moved into line for an eventual Participation Agreement are three separate dates. The most important of these three dates will always be the date you moved into line for a Participation Agreement.)
We have Severity Class 2 claimants in line for PAs. Two problems confront these claimants. The first is the number of Severity Class 3s ahead of them still waiting for funding. The second issue is the funding itself. We don’t know when we’re going to get it.
Right now, it appears likely that if you are already in line for a Participation Agreement as a Severity Class 2 claimant, you will receive an invitation to complete a Participation Agreement at some point between July 1, 2021 and June 30, 2022…but not before. This site will always be the best and most current source of information on this issue.
Home Inspector Re-certification Program
CFSIC will conduct two re-certification programs in June for existing CFSIC-certified home inspectors and professional engineers. These will be for re-certification purposes only. The course will be conducted by Kevin Miller, who is a well-known specialist in concrete science, and will include intensive course work. It will be conducted by invitation only, and because of the COVID-19 crisis will be held by videoconference.
CFSIC had intended to conduct a first-time home inspector certification course on July 14…but this course has been postponed until a time when it is deemed safe for attendees to occupy the same physical space.
CFSIC’s home inspector certification course is the only course of study available on the subject of the causes of crumbling foundations. It is attended by both licensed home inspectors and licensed professional engineers.
We advise claimants, however, that the CT Department of Housing does not currently permit reimbursement to claimants for the cost of visual examinations conducted by CFSIC-certified home inspectors who have undertaken the course work and passed the required concrete science examination.
Pending Claimant Applications to Stop on June 30
As a reminder, we’ll be stopping the application process on June 30 for Pending claimants. If you’re still thinking about applying…even though you may not have a complete application and supporting documents ready yet…we encourage you to get in line by going to the “For Homeowners” section on this website for more information.
Once we stop accepting applications, we may not re-open for applications for a year or even two years from now.
Healthy Homes Surcharge Update
We’re pleased to note that early indications (although the numbers are not yet definitive) are that the amount CFSIC will receive is somewhere north of $8 million from the $12 per policyholder surcharge that was levied between April 1, 2019 and April 30, 2020.
We will know more shortly and, of course, we will make an announcement on these pages about the final tally. As soon as these funds are received from the CT Department of Housing, the Superintendent will countersign as many as 55 Participation Agreements, which will immediately put these funds to use, which means 55 more families will be in line for the work to be done and for those families to be restored to their homes.
We have received a number of emails criticizing the existence of the Healthy Homes $12 per year homeowner insurance policy surcharge. We’re not sure how to respond to the people who write us complaining about their contribution of 4 cents per day to help families in the Northeast Corner of Connecticut for whom there are absolutely no other options except CFSIC. But then, if you don’t have a crumbling foundation, you haven’t “walked the walk.”
As We Prepare for the End of Our Second Fiscal Year…
CFSIC’s Board of Directors will meet shortly to hear about our results and to set strategy for the coming fiscal year.
As we prepare to end our second fiscal year, we are ready to meet our key challenges: uncertainty about the amount of funding we will receive from the Health Homes surcharge as well as the timing of our next round of funding from the CT Bond Commission.
One other important point will be addressed at this board meeting as well.
We hold $2.2 million in claim reserves on our balance sheet for claimants whose claims remain inactive, where by rights a simple step or two would make those claims active, and where, to date, there has been no activity of any reasonable nature by these claimants to move themselves into active status…in some cases for more than a year.
Why should you be concerned about this?
The answer is simple: we are holding reserves on our balance sheet for claimants who don’t appear to be serious about having their claims paid and their foundations repaired.
We can no longer afford to keep them in line, and once our new fiscal year begins, we’ll be notifying these claimants that they need to step up to the plate and follow through…or step out of the way in order to make room for families who need access to our funds.
On a positive note…we see with the good weather returning, a sharp uptick in construction activity throughout the Northeast Corner. The Superintendent has been touring sites and observing activity. As uncomfortable as it is to see a home “seven feet off the ground”…looking on the bright side, that means that work is being done and the crumbling foundations crisis is being alleviated.
Participation Agreement Suspension in Place
We have suspended the issuing of new Participation Agreements, and we will not resume Participation Agreement activity until at some point after July 1, 2020.
If you have not yet been provided with a Participation Agreement by the Superintendent’s office by now, you will not hear anything more about your Participation Agreement until we resume issuing them.
You are still in line. We haven’t lost you. We haven’t forgotten about you. We are all going to find out together and pretty much at the same time when CFSIC will be able to resume Participation Agreement activity. We are at a point within CFSIC where we must conserve our remaining cash until two things happen:
- we identify exactly how much funding CFSIC will receive from the $12 per homeowner policy surcharge; and
- we receive our next $20 million bond allotment from the CT Bond Commission.
Without knowing, with precision, the facts about when we will receive these two sources of funding, and in the case of the $12 homeowner policy surcharge, exactly how much we are getting, we will not be issuing any further Participation Agreements until this website announces further information.
CFSIC Has Resumed Application Activity
CFSIC began taking applications again effective 9:00 AM on January 13. We have re-opened the electronic platform to accept applications for claimants who agree to be placed in “Pending” status, and we have also enabled applications to be sent to the ESIS team by mail or other means.
CFSIC will remain open for the taking of applications through close of business on June 30, 2020.
To be clear, any claimant making claim to CFSIC on or after January 13 will be placed in “Pending” status. This means that your claim will be neither active nor inactive, regardless of the severity class code assigned to your foundation. CFSIC will not place a statutory financial reserve on your Pending claim until and only if we determine that we have sufficient funds to move any or all Pending claims into either inactive or active status.
What follows are some links that will take you to where you need to go:
The following Q&A should help everyone understand what is happening on January 13.
Question: I’ve been waiting for you to reopen your doors. I have a verified severity class coded 3 foundation, and I want to apply as a Type 1 claimant. I’m going to apply right away on January 13. What will happen to my claim?
Answer: You will become a “Pending Claimant” in our system. That means that we are creating a third category of claimant effective January 13, 2020. Right now, CFSIC only permits a claimant to be “active” or “inactive.” On January 13, you will only be able to file as a claimant under the new third status of claimant…a Pending Claimant. This means that we will register your claim and all the data you send us. We will provide you with a claim number, and we will acknowledge your claim…BUT even if you have a verifiable severity code 3 claim, you will not be able to move out of Pending status to either inactive or active status unless and until CFSIC’s sunset date is moved forward beyond June 30, 2022 AND we determine, starting in June of 2020, what the most likely scenario is for the amount of money we will receive from our share of the Healthy Homes surcharge.
Question: Are you saying that, even if I have a completed application and a verified severity class code 3 foundation, you will be unable to make my claim “active” or even “inactive” on or after January 13?
Answer: That’s correct. You will not be able to be an active or inactive claimant until the two things above are determined. You will be a Pending Claimant. You may remain a Pending Claimant for a very long time.
Question: That doesn’t seem fair. Why is it happening that way?
Answer: Because, until the June 30, 2022 sunset date gets moved to a later date AND we actually see exactly how much money we are getting in June 2020 from the Healthy Homes surcharge, we are flying blind…we can’t set any more claim reserves on any new claims beyond what we’ve already done. If we do that, we run the risk of making promises to claimants on or after January 13 that we can’t fulfill.
Question: So if the sunset gets moved to, say, June 30, 2030 (the end of the Healthy Homes surcharge funding schedule)…are you saying that you will permit claimants who applied on or after January 13 to become active?
Answer: We’re almost saying that…the sunset date is only part of our problem. You have to remember that no one inside or outside of state government can tell us specifically how much revenue we’ll be getting from the Healthy Homes surcharge (just like no one inside or outside of state government can tell us when our next $20 million will be available to us from the CT Bond Commission). We must have time to evaluate both critical sources of revenue in order to make the best decision for homeowners.
Question: But don’t you know for certain that you’re getting approximately $8.5 million in June of 2020 and every year thereafter through June 30, 2030?
Answer: That’s the estimate…but it’s only an estimate. That could be the number. The number could be higher. The number could be considerably lower. No one can tell us.
Question: So if the sunset date gets moved, you get enough money in June of 2020, and you make my Pending Claim an active claim, and I am a severity class 3, that means I jump ahead of all the existing severity class 2s that have been in line since last year…right?
Answer: No. As of January 13, 2020, we are not going to permit any severity class 3 claim originally filed as a Pending Claim to jump ahead of an active severity class code 2 already registered with us as an active claim prior to January 13, 2020. We have many active severity class coded 2 claimants who have been in line since January of 2019, and we have determined that it is fair to issue Participation Agreements first for all existing active 3s and 2s in our system before any Pending Claimant can get in line for a Participation Agreement. This is only fair, given how long people have waited and the fact that we are only going to get $40M more in funding over the next two years from the CT Bond Commission source…and on top of that, we have virtually no idea how much we will get in Healthy Homes surcharge funds.
Question: But I thought severity class coded 3 claimants would always be ahead of everyone else. What has changed?
Answer: CFSIC’s Underwriting and Claims Management Guidelines will change effective January 13, 2020 to require that CFSIC issue Participation Agreements to valid, active severity coded 3 and 2 claimants who have been in line since the inception of our program before we move any other Pending claimants into active or even inactive status…regardless of funding amounts to come. If you file on or after January 13, we will have a record of your claim, and we will also have significantly more data about the extent of the crisis…but we’re not going to be able to do anything with your claim until the sunset date gets moved and we have evidence of a flow of predictable funds from the surcharge.
Question: How long are you going to keep the application process open from January 13?
Answer: A minimum of 30 days, but we don’t know exactly how long yet beyond that.
Question: Why don’t you know?
Answer: CFSIC’s fiscal year budget in the year July 1, 2019 through June 30, 2020 is finite. When claims enter our system, we are charged by our outsourced claims management service company on a per-claim basis, as each claim is entered into the system, is analyzed, and is assessed. We have enough budget for the remainder of the fiscal year for a reasonable number of claims to enter our system between now and June 30, 2020…but not for a significant number to enter our system.
Question: But can’t you make an educated guess as to the number of people who are going to apply on or after January 13?
Answer: No, we can’t. Just before we opened our doors on January 10, 2019, we were told by email and through social media sources that we would get as many as 7,000 applications and that our application system would crash. We got 227 on the first day. We have found, through experience, that the wild projections as to application activity were then and may continue to be exaggerated. The reality of people actually taking action is unknown. We hope to have many new Pending Claimants, which will send a strong message about our need for funding. But to be clear, we will all see together what we will see…when we all see it.
Question: I want to apply as a Type 2 claimant. Will all the same rules apply to me?
Answer: Yes. (With one exception: Type 2 claimants do not require a severity class coding.)
Question: This all seems like a lot of work just to get in line and have my claim be in pending status for what might be a really long time. Is all this worth it?
Answer: That’s totally up to you. We’re giving people an opportunity to give us the data we need to raise more funds by identifying more potential claimants, who we hope to be able to assist at some point in the future when those funds arrive. We’ve gotten emails asking us to re-open for this purpose. We’re doing it. The question now will be how many victims of this crisis will actually take us up on our offer: file a claim, get in line, and with their claims registered…send a strong message about our need for more funding.
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 2019 Audited Financial
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.
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: email@example.com
– Email CFSIC at: firstname.lastname@example.org