Senate passes mortgage bill
HARTFORD, Conn.—A bill that aims to help struggling homeowners caught up in the subprime mortgage mess is headed to Gov. M. Jodi Rell, who said Wednesday she will sign it into law.
The Senate unanimously passed the measure on the final day of the 2008 session. The House of Representatives approved it earlier this session.
Sen. Robert Duff, D-Norwalk, co-chairman of the Banks Committee, called the legislation one of the most comprehensive bills in the nation that deals with the subprime crisis.
"We have done in 10 weeks what they haven't done in a year and a half," Duff said, referring to Congress.
The measure includes $40 million for the Connecticut Families Program, created by Rell and the Connecticut Housing Finance Authority last year to help homeowners refinance their mortgages.
It also includes $30 million in bonding so CHFA can buy mortages directly from lenders and place eligible borrowers in a more affordable, 30-year, fixed-rate mortgage; and sets aside $14 million to create a new, revolving loan fund that will provide emergency mortgage assistance program to help borrowers who don't qualify for other programs because of bad credit and other problems.
Other parts of the bill put new restrictions and licensing requirements on mortgage lenders and brokers, and create a foreclosure mediation program with the Judicial Branch.
Sen. Robert Russo, a real estate attorney, said some of his clients have suffered under predatory loans and were able to refinance their mortgages. But he said others had no available options and this bill would have helped.
"This is the sort of regulation that government really needs. We need to make sure this doesn't happen again," said Russo, R-Bridgeport.
Other highlights of bill include allowing CHFA to develop a program that allows it to buy foreclosed houses and use them for affordable and supportive housing. Also, the bill allows workforce development boards to reach out to homeowners facing foreclosure and provide them with job training skills to help them find adequate employment.
"The bill will help families get on the right financial track, maintain the value of Connecticut's housing stock and ensure that future lending practices do not lead us into further difficulties," Rell said.
ACORN, the Association of Community Organizations for Reform Now, which works on behalf of low- and moderate-income families praised the legislation. But the group also said it will require some changes next year, such as ways to eliminate predatory and abusive practices.
"This first step forward was fraught with compromises to satisfy the same industry that caused the current crisis," ACORN said in a written statement. "We must be vigilant to ensure that we haven't built a house with only three walls."
------
On the Net:
House Bill 5577
