A legislative proposal by U.S. Rep. Rosa DeLauro for protecting homeowners faced with foreclosure might also help the real estate industry and as well as the general economy, according to the Connecticut Association of Realtors.

The Realtor officials said the bill, known as the Regulation of Mortgage Servicing Act, would be especially beneficial to the Greater New Haven region, which has been hit harder with foreclosures and declining property values than elsewhere in Connecticut.

Bob Kennedy, executive vice president of the Connecticut Association of Realtors, said DeLauro’s bill was “long overdue.”

Kennedy appeared at the congresswoman’s news event on Jan. 30 at the headquarters of the United Way of Milford to show his organization’s support for the proposal to regulate the mortgage servicing industry.

“The idea is to set standards so the industry is more responsive to its customers,” he said.

Kennedy said most people might not understand the difference between bankers and mortgage servicers; lenders issue mortgages while servicers handle mortgage payments and escrow accounts.

The trouble is that the recession that hit in 2008 touched off sharp declines in real estate prices while causing an equally sharp increase in foreclosures. Kennedy said mortgage servicers were not able to handle the large number of foreclosures involving customers who owed more than their homes were worth.

“The issue is a huge one, very important to the economy,” he said.

“The New Haven area has a lot of them,” said Betty Alberico, chairman of the Greater New Haven Association of Realtors. “Every town has some.”

Other areas in the state where the foreclosure rate was higher than average were around Bridgeport, Waterbury and the Lower Naugatuck Valley, she said.

According to Jeff Gentes, a foreclosure prevention attorney for the Connecticut Fair Housing Center, about one in 10 mortgage holders in the New Haven-Milford region were already in foreclosure or behind at least 90 days on their payments, compared with a state average of one in 14.

Compounding the problem is the region’s higher-than-average unemployment rate and low rental housing vacancy rate, making it difficult to find affordable housing for families forced out of their homes, said Gentes, who also attended DeLauro’s announcement.

Homeowners complain that mortgage servicers frequently lose documents and that they may find themselves dealing with different people every time they call about their loan modification. These factors make the process more difficult and frustrating.

Kennedy said three ways to deal with possible foreclosure when the mortgage exceeds the value of the house are:

• lower the interest rate or extend the payment terms through refinancing
• grant a forbearance until the mortgage holder is able to resume making payments
• arrange a “short sale,” in which the bank accepts a lower amount than the outstanding principle of the loan.

The housing experts and Realtors said the Regulation of Mortgage Servicing Act would:

• require servicers to assign a single person to each foreclosure or loan modification
• prohibit “dual tracking” by servicers, the practice of proceeding with a foreclosure while working on a loan modification
• require a third-party review of loan modifications and foreclosure alternatives before sending a family into foreclosure.

“The main purpose is to keep people out of foreclosure,” Kennedy said.

Alberico said another benefit would be to restart the real estate market, which she said would in turn lead the country back to economic recovery.

She said people are holding off on buying a house because they are afraid they might lose their jobs. Still, she said, “From a buyer’s point of view, I’ve never seen a better time to buy a house.”

Recent economic news, such as last week’s employment report that showed job growth and a lower unemployment rate, are glimmers of good news. Alberico said she is optimistic that 2012 will be a better year. “We’re getting some signs of it,” she said.

“We need to get our economy back. We need to get people working again,” Alberico added.