State Senator Bob Duff
January 30, 2008
Duff, Representative Barry Blast Ineffective Mortgage Assistance ProgramBanks Committee chairs call lack of CHFA program approvals ‘unacceptable’
The co-chairs of the General Assembly's Banks Committee today blasted a $50 million program created by Governor M. Jodi Rell through the Connecticut Housing Finance Authority (CHFA) and said that they will issue a package of reforms aimed at mitigating large numbers of foreclosures in Connecticut in the coming days.
State Senator Bob Duff (D-Norwalk) and Representative Ryan Barry (D Manchester) said that the CT FAMILIES (Connecticut Fair Alternative Lending Initiative & Education Services) failure to approve a single loan since starting to accept applications in December 2007 shows that the program is not meeting any expectations and is not providing any kind of real relief to those on the verge of foreclosure.
"This program was touted as an investment that would keep families in their homes and help to stabilize our housing market," said Senator Duff. "Clearly, what homeowners facing rising interest rates and a mountain of debt were sold in no way coincides with reality. The reality is that the guidelines for this program make it impossible for most people facing foreclosure to ever qualify for assistance. That's unacceptable."
"This ill-advised concept arose out of a task force report put together by leaders in the lending industry," Representative Barry said. "There was a shortage of representation on that task force of minorities and people who represent low-income families. I think that is a major reason why this program misses the mark. It clearly is only going to help a very limited number of people."
The governor announced creation of the program and a hotline in November, and three lending institutions began accepting applications for assistance a month later. Since then, the call center has received nearly 2,000 calls and 400 applications have been submitted.
To date, no loans have been approved.
Senator Duff and Representative Barry said that they plan to release a complete package of reforms to address problems with subprime mortgages and predatory lending within the next few days. The package will be up for consideration during the General Assembly's upcoming legislative session.
"We need to look at the situation and craft real solutions that address the short-term and long-term problems," said Senator Duff. "Initiating feel good measures that don't actually do anything to help real people and spewing rhetoric about the American Dream are pointless if the policies in place do nothing to resolve the problem."
"While I realize the government cannot help every person," said Representative Barry, "we've got to make a much better effort than that put forth by Governor Rell."
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