Gov. M. Jodi Rell said Wednesday that she will propose legislation to tighten the regulation of mortgage lending in the state to prevent problems like those from the recent sub-prime mortgage crisis.
Although the bill is written broadly, it targets mortgage companies that aren’t chartered as banks but licensed through the state banking department. Most sub-prime mortgages – loans to borrowers with tarnished credit – were made by mortgage companies specializing in those loans.
The proposed legislation would closely follow the recommendations of the governor’s sub-prime task force, which issued a report in November. It would institute more stringent underwriting standards, require lenders to verify borrowers’ income and increase the penalties for fraud.
Other business initiatives in Rell’s midterm budget include:
$5 million to establish nanoscience centers at Yale University and the University of Connecticut.
Nearly $1 million to increase the number of nursing graduates at state universities and to support nursing students at community and technical colleges.
A $300,000 loan reimbursement program for engineering students who stay in Connecticut.
