Rell Pledges Relief to Contain Bank Foreclosed Home

by on Foreclosure Help

Distressed homeowners can expect more aid to come their way to help them save their properties from becoming bank foreclosed home. This is what Connecticut Governor M. Jodi Rell told the audience during the ceremony for the unveiling of $2.5 million federal funds intended for the brownfield redevelopment at the Housatonic Community College.

Rell reflected on the change in the mood of the country from the previous year, adding that the economic downturn has victimized everyone in the state. She pointed out the crisis in the subprime mortgage loan market and noted that many homeowners are currently struggling and need help to survive the crisis.

According to industry analysts, many homeowners who are creditworthy are struggling to make their mortgage payments because they have lost their jobs or their working hours were reduced.

As part of its assistance to help distressed homeowners avoid foreclosures, the state expanded the eligibility for its Connecticut Fair Alternative Mortgage Lending Initiative and Education Services (CTFAMILIES) and the Emergency Mortgage Assistance Program (EMAP) in order that many families could avail of these programs.

Under the CTFAMILIES, a 30-year fixed rate mortgage is provided to homeowners. The original program was intended for homeowners with subprime adjustable rate loans. Under the new CTFAMILIES, all types of home loans are eligible for refinancing.

The program received many criticisms because since it was launched in December 2007, it was able to refinance just 72 loans. Data released by the Connecticut Housing and Finance Authority showed that the program declined 79 loan applications because borrowers do not have the ability to repay loans while 158 applicants did not qualify in the program’s income requirement.

Meanwhile, EMAP provides loans with low interest rates to homeowners who experience a drop in their income to help them make their accounts current. However, the program was criticized for providing assistance only to just 50 homeowners in its first year of operation.

The old EMAP was available only to homeowners who lost about 25 percent of their income. But the new program removed the income requirement and added unanticipated household expenses. This means that homeowners who anticipate loan delinquency can apply for the program.

In addition, Rell signed a law mandating courts to supervise foreclosure mediation between lenders and borrowers.