Webster Bank Responds to Campaign Questions Raised in U.S. Senate Race
WATERBURY, Conn., Sept. 7, 2012 /PRNewswire/ -- Webster Bank today responded to questions posed in a press release by the campaign of the Republican candidate for U.S. Senate from Connecticut regarding mortgage and home equity loans made by the bank in 2005 and 2008 to her Democratic opponent.
In 2005, Chris Murphy, then a state senator, applied to Constitution Mortgage Co., for a mortgage and home equity loan in connection with a home purchase. Constitution Mortgage Co. was a mortgage broker that originated loans on behalf of lenders, including Webster Bank's wholesale mortgage banking division. Webster underwrote and funded the 30-year first mortgage loan, which carried a fixed interest rate of 5.625 percent, and the home equity loan, which carried a fixed interest rate of 6.75 percent. Webster subsequently sold the first mortgage to Chase Home Finance, consistent with Webster's wholesale mortgage banking practices. Webster held the home equity loan for its own portfolio, also its customary practice.
Both loans conformed to all underwriting guidelines, were approved with no exceptions, and were priced in line with prevailing market rates and terms.
In 2008, Webster refinanced Congressman Murphy's home equity loan into a home equity line of credit, again with no exceptions and at market rates and terms. It is notable that real estate values generally rose during the 2005-2008 timeframe. The 4.99 percent interest rate on the credit line was well above the 3.99 percent rate that the bank's most creditworthy customers were receiving at the time. The credit line was repaid when the home was sold in 2010. Currently Murphy has no outstanding loans with Webster.
Murphy met the terms of all of his loan agreements with Webster. He received the same high quality service extended to all Webster customers.
Contrary to the Republican candidate's campaign press release, Jim Smith, chairman and CEO of Webster Bank, never held any official, permanent position on any of Murphy's campaigns. Smith and Murphy did not discuss at any time any of Murphy's loans, nor did they have any conversations regarding political action committee (PAC) contributions. Smith was not aware of any actions by Chase.
Webster's PAC donated a total of $2,100 to Murphy's congressional campaigns between 2008 and 2010 and has not made a donation since. Webster's PAC did not contribute to Murphy's initial 2006 congressional campaign. Murphy's service in Congress and on the House Financial Services Committee had no effect on Murphy's banking relationship with Webster.
Regarding TARP, Smith never requested or sought a U.S. Treasury investment in Webster. In fact, Webster initially was undecided as to whether to accept Treasury's investment. Webster always exceeded regulatory requirements for well-capitalized institutions and repaid Treasury's $400 million in 2010, earning taxpayers a return of $57 million.
Webster Financial Corporation is the holding company for Webster Bank, National Association. With $19 billion in assets, Webster provides business and consumer banking, mortgage, financial planning, trust and investment services through 167 banking offices, 464 ATMs, 290 of which are owned by Webster and 174 of which are branded, telephone banking, mobile banking, and the Internet. Webster Bank owns the asset based lending firm Webster Business Credit Corporation; the equipment finance firm Webster Capital Finance Corporation; and provides health savings account trustee and administrative services through HSA Bank, a division of Webster Bank. Member FDIC and equal housing lender. For more information about Webster, including past press releases and the latest annual report, visit the Webster website at www.websterbank.com.
Sarah Barr, 203-578-2287
SOURCE Webster Financial Corporation