This news release was issued by the Governor's Office.

August 5, 2009

Governor M. Jodi Rell today announced that more Connecticut families facing foreclosure will be able to get the financial help they need to stay in their homes thanks to new legislation she has signed into law.

“The national recession has threatened to shred the American dream,” Governor Rell said during a bill signing ceremony at Housatonic Community College in Bridgeport. “At this point we have moved beyond the fallout of shaky subprime mortgages and predatory lending. Now, people risk losing their homes because they are losing their jobs. Our goal is to provide a safety net for hard-working people who are coping with the loss of a paycheck.”

The Governor said one bill makes the state’s foreclosure mediation process mandatory – rather than optional – for all foreclosures that began after July 1. A second bill expands eligibility for two state-run programs that provide temporary hardship assistance and more affordable mortgage rates for responsible homeowners.

The Governor signed Senate Bill 948, An Act Concerning Implementation of the S.A.F.E. Mortgage Licensing Act, which mandates foreclosure mediation.

“It’s been proven that mediation is an effective tool homeowners can use to ward off foreclosure. That is exactly what our goal is and what this law is intended to bring about – fewer foreclosure and more happy endings,” the Governor said.

A second measure is House Bill 6481, An Act Concerning the Emergency Mortgage Assistance Program, which will make it easier for more borrowers to get hardship assistance, counseling and refinancing into more affordable 30-year fixed-rate mortgages from the Governor’s two foreclosure prevention programs.

The Governor’s Emergency Mortgage Assistance Program (EMAP) and CT FAMLIES (Connecticut Fair Alternative Mortgage Lending Initiative and Education Services) are administered by the Connecticut Housing Finance Authority (CHFA).

The EMAP program is available to eligible homeowners who have fallen behind because of a temporary hardship. It provides a loan to bring delinquent mortgages up to date and monthly assistance if necessary. The new law allows CHFA to determine what constitutes a significant drop in the borrower’s income and to broaden the definition of circumstances outside the homeowner’s control. It also allows homeowners to apply for the Emergency Mortgage Assistance Program even before receiving a notice of foreclosure if they are 60 days or more delinquent on their mortgage.

The law also expands eligibility for CT FAMLIES from homeowners with adjustable-rate mortgages to homeowners with all types of mortgages. The program provides counseling, financial education and allows eligible borrowers to convert their loans into 30-year fixed-rate mortgages.

“This program helps get homeowners back into a stable mortgage with rates they can afford,” Governor Rell said. “A stable housing market is one of the elements essential for economic recovery. It will help bring neighborhoods back to life and the keep the goal of home ownership within reach for anyone with a dream – the American dream.”

For more information: www.chfa.org