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76 Connecticut RANK: 7 90+ Day Foreclosure Unemployment Delinquency Rate Rate Rate FEBRUARY 2015 2.58% 2.23% 6.4 YEAR AGO 2.69% 3.67% 7 YEAR-OVER-YEAR CHANGE -4.0% -39.4% -0.6 Top County WINDHAM COUNTY 90+ Day Foreclosure Delinquency Rate Rate FEBRUARY 2015 4.17% 3.83% YEAR AGO 4.22% 6.26% YEAR-OVER-YEAR CHANGE -1.1% -38.7% Top Core-Based Statistical Area NORWICH-NEW LONDON, CT 90+ Day Foreclosure Delinquency Rate Rate FEBRUARY 2015 3.02% 2.60% YEAR AGO 2.91% 4.47% YEAR-OVER-YEAR CHANGE 3.5% -41.8% note: The 90+ day delinquecy rate is the percentage of outstanding mortgage loans that are seriously delinquent. The foreclosure rate is the percentage of outstanding mortgage loans currently in foreclosure. State rank is based on the February 2015 foreclosure rate. All fi gures are rounded to the nearest decimal. The unemployment rate refl ects preliminary February 2015 fi gures released by the Bureau of Labor Statistics. All other data courtesy of LPS Data & Analytics. IN THE NEWS Yale Law School Files Amicus Brief in 'Stripping Off' Case Headed to U.S. Supreme Court Yale Law School's Mortgage Foreclosure Litigation Clinic and the Connecticut Fair Housing Center (CFHC) filed an amicus brief with the U.S. Supreme Court in support of the respondents in a case to decide whether underwater homeowners in Chapter 7 bank- ruptcy can legally eliminate the liability on second mortgages, a process known as "strip- ping off," according to an announcement on Yale Law School's website. Yale's Mortgage Foreclosure Clinic, which provides legal assistance to individuals who cannot afford private counsel, and the CFCH, which represents homeowners in foreclosure litigation and counsels about 1,800 homeown- ers per year, filed the brief on behalf of David Caulkett and Edelmiro Toledo-Cardona, two Florida homeowners in bankruptcy who had their second mortgages with Bank of America extinguished by a bankruptcy judge following the housing crisis of 2008 based on the fact that they were underwater—they owed much more than their houses were worth. When Bank of America appealed the bankruptcy judge's rulings, both cases were decided in favor of the homeowners by the 11th Circuit U.S. Court of Appeals in May 2014. Bank of America appealed the decision by the appellate court, and the U.S. Supreme Court agreed in November to hear the cases. e SCOTUS blog describes the issue in the case of Bank of America v. Caulkett as Whether, under Section 506(d) of the Bankruptcy Code, which provides that '[t]o the extent that a lien secures a claim against the debtor that is not an allowed secured claim, such lien is void,' a Chapter 7 debtor may 'strip off' a junior mortgage lien in its entirety when the outstanding debt owed to a senior lienhold- er exceeds the current value of the collateral." In the brief, Yale's clinic and the CFHC contend that investors holding second mort- gages, which are often large banks, often ob- struct arrangements that would be beneficial to homeowners and first mortgage holders and that homeowners would be able to stay in their homes if they were allowed to strip off second mortgages that had no value. According to the Yale clinic, the bank- ruptcy code allocates the debtor's assets by prioritizing certain secured loans, and it allows financially burdened borrowers to get a fresh start. Functionally, underwater second mortgages are no different from unsecured debt, such as credit card debt. "In the aftermath of the housing crisis, fully underwater second mortgage holders have often been able to use their hostage power to destroy workouts that would be beneficial for first mortgage lenders, homeowners, and surrounding communities," said Alexa Milton, a Yale law student intern in the Clinic. "e Bankruptcy Code is designed to prevent exactly this kind of collective action problem." e students at Yale Law School contend that second mortgages do effectively promote homeownership the way first mortgages do, and therefore the "American Dream" of homeownership is not undermined by removing unwarranted protection for under- water second mortgages. "Second mortgages really play a peripheral role in a healthy housing market," said Beezly Kiernan, another law student intern in the clinic. "In fact, piggyback second mort- gages contributed to an unhealthy housing market—as well as the financial crisis and subsequent recession—in the mid-2000s." e Yale Law School has a particular in- terest in the Caulkett case because Hartford, Connecticut, is the most underwater city in the United States with a 56 percent negative equity rate. Connecticut also includes three other cities in the top 100 in the nation in negative equity rate, including New Haven, where Yale is located. Arguments in the case of Bank of America v. Caulkett began March 24 in the nation's highest court. e Supreme Court is expected to make a decision next month, according to the press release. Delaware RANK: 10 90+ Day Foreclosure Unemployment Delinquency Rate Rate Rate FEBRUARY 2015 2.83% 2.06% 4.8 YEAR AGO 3.24% 2.43% 6 YEAR-OVER-YEAR CHANGE -12.9% -15.2% -1.2 Top County KENT COUNTY 90+ Day Foreclosure Delinquency Rate Rate FEBRUARY 2015 4.10% 3.06% YEAR AGO 4.76% 3.52% YEAR-OVER-YEAR CHANGE -13.8% -13.1% Top Core-Based Statistical Area DOVER, DE 90+ Day Foreclosure Delinquency Rate Rate FEBRUARY 2015 4.10% 3.06% YEAR AGO 4.76% 3.52% YEAR-OVER-YEAR CHANGE -13.8% -13.1% note: The 90+ day delinquecy rate is the percentage of outstanding mortgage loans that are seriously delinquent. The foreclosure rate is the percentage of outstanding mortgage loans currently in foreclosure. State rank is based on the February 2015 foreclosure rate. All fi gures are rounded to the nearest decimal. The unemployment rate refl ects preliminary February 2015 fi gures released by the Bureau of Labor Statistics. All other data courtesy of LPS Data & Analytics. 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