Gov. M. Jodi Rell's new program to assist first-time homeowners faced with huge increases in their adjustable mortgage rates can already use some revamping.
However well-intentioned, the $50 million CT Families program administered by the Connecticut Housing Finance Authority has approved only 25 loans. Clearly, the loans are not getting to those they were intended to help.
A spokesman for Gov. Rell said this past week that she is open to tweaking the program and finding more ways to reach more people.
The subprime mortgage crisis is threatening thousands of Connecticut residents with the loss of their homes. Of the 21,000 mortgages that are resetting at higher rates, only 3,000 helped finance first-home purchases.
CT Families' guidelines are almost identical to those for regular mortgages and likewise take time to process. Qualified borrowers must have fallen behind on their payments due to interest rate increases and must show they can afford to continue paying all of their other bills on time.
CT Families may in effect be tailored for people who don't need help.
Senate Democrats have proposed a more flexible plan to help families facing foreclosure. The plan, designed by Banks Committee Co-Chairmen Sen. Bob Duff of Norwalk and Rep. Ryan P. Barry of Manchester, would create a $100 million emergency mortgage assistance fund that would go beyond covering first-home buyers and include those in danger of losing their homes because of loss of or change in income.
Yes, there will be risks. But it wouldn't be a relief program if it didn't involve risk.
Failure to reach more people caught in the mortgage crisis could have a devastating effect on the economy.
Reprinted with permission of the Hartford Courant.
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