State Senator Eric D. Coleman
June 18, 2008
Mortgage Relief Bill Backed By Senator Coleman Signed Into Law By Governor Rell
Senator Eric Coleman (D-Bloomfield) participated in the resolution of and voted in favor of the bill approval by the General Assembly and signed into law by Governor Rell that provides emergency mortgage relief and other measures to help the thousands of homeowners in Connecticut who are struggling to keep their homes because of the subprime mortgage crisis.
The legislation creates mortgage relief programs and changes to state banking laws to focus on the subprime mortgage crisis in Connecticut. That includes:
- Establishes the Homeowner's Equity Recovery Opportunity Loan (HERO) program through the Connecticut Housing Finance Authority (CHFA). It authorizes CHFA to use $30 million in existing bonds to purchase mortgages directly from lenders and place eligible borrowers on an affordable payment schedule for a 30-year fixed-rate mortgage.
- Reinvests $14 million in the state's emergency mortgage assistance program (EMAP) for borrowers facing foreclosure
- Continuation of the $40 million CT FAMILIES assistance program
- Empowers CHFA develop a program to purchase foreclosed residential property for the purpose of providing affordable and supportive housing.
- Creates a foreclosure mediation program within the state Judicial Branch.
- Defines "nonprime loans" and imposes new restrictions and licensing requirements on mortgage lenders and brokers.
- Gives the commissioner of the state Department of Banking additional responsibilities.
"I hope this legislation will benefit consumers in Connecticut who are facing foreclosure actions. We all are considerably distressed and alarmed at the rate of foreclosures nationwide, specifically in Connecticut," said Senator Coleman. "I think this bill is a step in the right direction in addressing the dire situation resulting from subprime loans and the crisis that is surrounding that situation."
"Whatever we can do to preserve people's ownership of their homes, I think we ought to do. The bill seems to be a very important remedial legislation at a time when real economic crisis for homeowners is occurring," said Senator Coleman. "It is my hope that the judges who hear foreclosure cases will apply this bill in a way that allows this remedial purpose to be carried out."
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