Low- and moderate-income Connecticut residents will be able to take advantage of an extended and affordable lending mortgage program announced Monday by Bank of America and the Neighborhood Assistance Corp. of America.
Through a contract with the NACA, Bank of America will make $6 billion available for qualified lenders, said Bruce Marks, chief executive officer of the nonprofit NACA.
"We should be looking to do a lot in Connecticut, said Marks. The NACA opened an office in New Haven this month; it operates offices in 30 cities.
The money is going to be pooled among the offices, Marks said. "We will meet whatever the demand is in Connecticut.
Qualified applicants can receive a mortgage with no downpayment or closing costs and fees; the fixed interest rate over a 30-year mortgage is 4.875 percent.
The nonprofit earns an average fee of 1 to 1.5 percent of the value of each mortgage, Marks said.
That money pays for consultants who work with prospective homeowners.
"All the services are free, Marks said, but clients have to attend a financial and a home-buying workshop and work with the consultants, who go through their finances and credit ratings. Once NACA qualifies a home buyer, that person submits an application to a participating bank.
According to Marks, under the contract, the banks must approve a mortgage once NACA qualifies an applicant.
The program announced Monday is an extension of a commitment Bank of America made in 1995, when it pledged $500 million to NACA clients. The bank increased that commitment to $3 billion in 1998.
Charlotte, N.C.-based Bank of America's prospective purchase, FleetBoston Corp., had committed $200 million to NACA's mortgage program. That money, said Marks, is nearly gone, but will be available until federal regulators approve the merger.
Also Monday, Bank of America announced that its shareholders will get to vote on the merger during a special hearing that begins at 10 a.m. on March 17 in the International Trade Center in Charlotte. According to the bank, shareholders of record on Jan. 26 will be eligible to vote.
The merged bank's commitment to its communities is one issue Connecticut Attorney General Richard Blumenthal will raise during a hearing before those federal regulators Wednesday in Boston.
"It still seems very long on rhetoric, short on specifics, Blumenthal said Monday of the Bank of America announcement. "Bank of America seems to be doing some anticipatory spin for the hearing on Wednesday.
Blumenthal said he wants the federal regulators to reject the merger until Bank of America and FleetBoston provide specific, state-by-state information on their planned commitment to community reinvestment, which also includes charitable contributions.
Blumenthal also wants the banks to promise not to lay off FleetBoston employees for at least four years following the merger.
Blumenthal and state Treasurer Denise Nappier have scheduled an informal public hearing on the merger for Jan. 28 at 10 a.m. at the Legislative Office Building in Hartford.
"I don't think that what we're doing is going to block the merger, he said. Rather, he said, he wants to "improve it.
For more information, contact the New Haven NACA office at 562-6220.
