In a letter to the editor in the Thursday edition of the Republican American newspaper, a retired bank regulator for the state of Connecticut writes that CT-Democratic party congressional candidate Chris Murphy did get a sweetheart deal, when he received a home-equity credit line in 2008. Lewis S. Clark of Middlebury writes the 4.99 percent given to Murphy “appears to have been preferential.” Clark’s letter in part:
“U.S. Rep. Christopher Murphy’s home-equity credit line has been in the news recently. In 2008, Rep. Murphy reportedly obtained a 4.99 percent interest rate on a home-equity loan, even though his first mortgage was in foreclosure and his property taxes were delinquent. These are very unusual circumstances. The 4.99 percent interest rate appears to have been preferential because the rate appears not to have been in accord with the prevailing rates for borrowers who were already substantially delinquent on their mortgage debt and property taxes.
Loose lending standards were an underlying cause of the banking crisis of 2008, and loans such as the credit line received by Rep. Murphy appear to have been a contributing factor in exacerbating this crisis. Furthermore, the loan smells like a sweetheart deal since prevailing interest rates for first mortgages were above 6 percent at that time, and yet Rep. Murphy obtained a more credit-risky line of credit than a first mortgage and the interest rate was only 4.99 percent for him, even with his poor credit history.”