Murphy refuses to release credit score, loan documents

The U.S. Senate campaign of Democrat Chris Murphy says it will not release his application for a $43,000 home-equity credit line that Republican Linda McMahon claims was a sweetheart deal from a political ally, Webster bank.

Murphy’s campaign spokesman, Ben Marter, responded with a one-word answer when asked by The Mirror if the candidate would disclose the application, related documents or his credit score: “No.”

He declined further comment, a sign that the campaign believes it can weather McMahon’s claims that Murphy could not have legitimately obtained the credit line in July 2008, slightly more than a year after he faced a foreclosure action.

Webster Financial, meanwhile, is aggressively defending the credit line it granted Murphy and his wife, Cathy, on their home in Cheshire, releasing summary data on similar loans made that summer.

The 4.99 percent interest rate Webster charged the couple was one point higher than its best advertised rate and a point-and-a-half higher than the bank charged its most credit-worthy customers, bank officials said in an interview Thursday.

From mid-June to mid-August in 2008, Webster approved 775 lines of credit at rates ranging from 3.49 percent to 6.99 percent, said Sarah Barr, vice president of external communications.

“When you look at only applicants with credit profiles similar to the Murphys, the rate spread was 4.74 percent to 5.24 percent. The loan for Murphy and his wife was right in the middle,” Barr said.

Webster ad

A Webster ad from 2008

The bank also provided advertising showing the bank was offering home equity lines 1.01 percentage points below the prime interest rate of 5 percent.

The Murphys met the bank’s underwriting standards in 2008, when a couple applying for a loan was judged on the higher of their individual credit scores, said Robert Guenther, the bank’s senior vice president for public affairs.

Today, the bank has tighter standards: It would rely on score of the spouse with the lower credit rating, he said.

The bank officials did not divulge Murphy’s score, nor did they say if he could meet present underwriting standards.

But in the summer of 2008, Murphy was judged a good risk, despite the two suits over late payments. His household income had jumped with his marriage, and the couple’s debt-to-income ratio was good, they said.

“Murphy’s history of missed payments were reflected in the credit bureau report. That foreclosure action was filed 14 months earlier and 60 days later was immaterial,” Guenther said.

If the foreclosure had gone to judgment, the bank might have responded differently.

“This thing was withdrawn within 60 days. It was Chris Murphy’s wake-up call,” Guenther said. “He was applying with his wife, who had a good credit history.”

The officials were rebutting McMahon’s claim that Webster gave Murphy “a preferred rate,” one that was suspicious given that Murphy had been sued for nonpayment of rent in 2003 and briefly faced a foreclosure action in 2007.

Murphy resolved both cases quickly by making the overdue payments. He has not given a detailed explanation about why he did not respond to warning letters that typically precede a foreclosure suit.

“I honestly think he needs to be honest with the people of Connecticut. It just doesn’t pass the smell test to me,” McMahon said in an interview. “We can all get in financial difficulty. I’m not faulting anyone for that.”

McMahon and her husband declared bankruptcy more than 30 years ago. The extent of their debts have not been disclosed, and McMahon’s campaign says it has no records to make public.

McMahon said the loan was suspicious, because the bank’s political action committee had contributed to Murphy’s campaign, and Murphy voted for a bank bailout program that eventually provided Webster with $400 million.

But the loan was made in July 2008, three months before Congress approved the bailout. And the approval for the $400 million loan to Webster was made in November by the Bush administration’s Treasury Department, not Congress.

According to Pro Publica’s “bailout tracker,” Webster finished repaying the $400 million, plus $57.1 million in dividends, on June 2, 2011.