State Senator Donald E. Williams, Jr.
June 18, 2008
Mortgage Bill Signed Into Law--Eastern Connecticut Families to Benefit
Senate President Donald E. Williams says hard hit Windham County will see immediate help
Senate President Donald E. Williams, Jr. say today's signing of the historic Mortgage bill by Gov. Rell will bring immediate and significant help to families across Connecticut--especially those in Windham County--one of the areas hardest hit by the foreclosure crisis.
The bill devotes tens of millions of dollars to mortgage assistance programs, helps prevent predatory lending, and protects the state's fragile economy. The need for these reforms is especially critical in Windham County. According to a 16 month town-by-town analysis of home mortgage data by the Hartford Courant, Windham County, "...is hardest hit, with 23 foreclosure-related filings for every 1,000 households, compared with 17 in the state as a whole."
"I see the effects everyday that these foreclosures in Windham County have on families and the local economy," said Senator Williams. "People lose their homes, neighbors face declining property values, and towns are left with fewer taxpayers to pay for schools and other vital services. The legislation signed today takes proactive steps to help solve this crisis." The legislation creates several programs and makes a number of changes to state banking law.
Specifically, it:
- 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. To qualify for HERO assistance, borrowers must have made an effort to meet financial obligations, have a sufficient and stable income, have the legal title to the mortgaged property and reside in it as their permanent residence, show an accounting for their cash flow and agree to attend in-person financial counseling at a CHFA approved agency.
- Reinvests 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.
- Establishes a mortgage crisis job training program at Workplace Inc., in association with other regional workforce development boards and one-stop centers.
- 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
- Allows the commissioner to participate in the Nationwide Mortgage Licensing System.
The measure-House Bill 5577-was approved in a 36-to-0 vote in the Senate.
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