First year of Loan Assistance Program Saved. Homeowners Average of Nearly $400 Per Month
HARTFORD, CT – November 18, 2008 – (RealEstateRama) — Governor M. Jodi Rell today announced that Connecticut homeowners using the refinancing program she created last December in response to the subprime mortgage crisis have reduced their monthly payments by an average of $397 in the first year of the program.
The Governor’s $40 million CT FAMLIES (Connecticut Fair Alternative Mortgage Lending Initiative and Education Services) was one of the first in the nation to address the foreclosure turmoil.
“People were losing their homes at an alarming rate across the nation and it was imperative we take action much sooner than later,” Governor Rell said. “The CT FAMLIES program brings real financial relief to so many homeowners and is providing thousands more with counseling.”
The program, administered by the Connecticut Housing Finance Authority, assists low- and moderate-income borrowers who took out a subprime loan for their home purchase by refinancing them into 30-year, fixed-rate loans.
The Governor said, in some cases, eligible homeowners saw their mortgage payments decrease by more than $1,000. Additionally, more than 2,400 homeowners received free debt counseling through CT FAMLIES. The Governor said that CHFA recently received a federal grant of $85,000 in October to support additional counseling services.
CT FAMLIES has received more than 15,000 calls to date. CHFA has either closed loans or approved CT FAMLIES refinancing of $12 million in loans for 60 homeowners and has about 130 loan applications in process totaling nearly $27 million. The CT FAMLIES loans are offered at the CHFA regular homebuyer rate currently at 6.125 percent.
The Governor said the program’s outreach included 14 statewide housing fairs that provided “one-stop shopping” by assembling lenders, including many of the major mortgage companies that wrote subprime loans, debt counselors and utility companies.
“These fairs proved to be very successful by providing homeowners with essential resources that will help them hold tight to their American dream,” Governor Rell said. “We encouraged borrowers to come in and talk to the experts before they got in trouble.”
Governor Rell said about 45 percent of borrowers were able to refinance into the CT FAMLIES program before their adjustable mortgages reset into higher rates.
Borrowers who are not eligible for the CT FAMLIES Program have been successful in negotiating repayment plans or modifications through the Hope Now Alliance. The Alliance, a coalition of counselors and lenders has assisted more than 12,500 Connecticut homeowners through a modification of their loan or the establishment of a repayment plan.
“Homeownership is one of the best investments anyone can make,” Governor Rell said. “I want to assure the hard working men and women of this state that we will do all we can to help keep them in their homes and keep the Connecticut economy moving forward.”
(For more information on CT FAMLIES: Call 877-571-2432 or visit www.chfa.org)
