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State Expands Program to Help Subprime Mortguage Homeowners
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The state is to broaden the reach of its program to help homeowners caught in the sub prime mortgage crisis.

The changes to the Connecticut Families program come after sustained criticism, and the proposal of an alternative plan by state Democrats.  Until now, the $50 million program was offered only to first time buyers with adjustable rate mortgages, about 3,500 of the some 70,000 sub prime loans currently outstanding in Connecticut. 

But progress in approving loans has been slow, and most homeowners who’ve enquired have failed to meet the credit qualifications.  Now the plan will be offered also to homeowners who’ve refinanced into sub prime loans, as well as the first time buyers.  The interest rate offered will be lowered a quarter point, and in addition, the Connecticut Housing Finance Authority, which administers the program, will try to add more financial institutions to administer the loans – so far only Webster Bank, McCue Mortgage and NewAlliance Bank are participating. 

CHFA says for homeowners who still don’t qualify for Connecticut Families, they’ll be doing more outreach to put borrowers in touch with their loan servicers, to see if their original loans can be restructured.