Foreclosure relief being promised by Governor Jodi Rell

A ceremony was held at Housatonic Community College in which foreclosure relief was promised by Governor Jodi Rell. $2.5 million was earmarked for the redevelopment of Brownfield. She said, “The recession has caused casualties at every level in the state.” She was recalling how in one year the socio-economic climate of the nation had changed. At that time there was no utterance of ‘recession’ and the talk was only about sub-prime mortgages. But today more families are facing risk of losing their foreclosure homes and are badly in need of help. In many houses where two people were working now there is only one breadwinner. Sometimes although there has been no outright loss of job, the hours of work and consequently pay packets have been reduced.

Connecticut State has widened the eligibility circle for Connecticut Fair Alternative Mortgage Lending Initiative and Education Services (CTFAMLIES). The scope of Emergency Mortgage Assistance Program (EMAP) has also been stretched to include more families in need of help.

CTFAMLIES sanctions 30 year fixed rate mortgages to house owners. Originally it was meant for those with sub-prime and ARM loans but now as per the new law it widens the net by allowing all kinds of mortgages to be refinanced. The programme was started in the last weeks of 2007. It was criticized for not being effective enough. Since its start in 2007 only 72 borrowers had benefited.

Heavy criticism has also been directed against EMAP for its poor performance. Only 50 families have benefited. EMAP offers loans to borrowers with very low interest to allow them to catch up on their missed mortgage payments when their earnings have dropped.

As per the previous law the drop in income had to be by about 25% but the new clause removes that condition. On the other hand it includes emergency household expenses and permits borrowers who fear a fall in their income to also apply. On 10th July the law came into force and since then 19 more families have come forward to apply for loans amounting to $1.4 million during the forthcoming 60 months.

Rell also inked a law that will make it mandatory for courts to mediate between lenders and borrowers prior to starting of foreclosures. So far since last year 12th June the mediators have been able to sift through 2,233 applications; of these 1,313 have met with success.