February 17, 2009
More Wisconsin residents are facing the prospect of losing their homes, and stemming the tide of foreclosures will be difficult, a top housing official warned lawmakers on Wednesday.
More than 2.5 percent of Wisconsin mortgages are already in foreclosure and that rate is expected to continue to increase in coming months, said Antonio Riley, executive director of the Wisconsin Housing and Economic Development Agency.
Riley said a housing problem that started with banks making risky loans with high interest rates "has grown into a larger economic issue." A soft housing market means many owners can't sell their homes, and increasing unemployment, divorce and other problems lead them to default on their mortgages, he said.
"With so many reasons for foreclosure and so many unique and heartbreaking situations, coming up with solutions will not be easy," Riley told an Assembly committee on housing.
WHEDA was forced in October to suspend its loans for low- and moderate-income home buyers as a result of the freeze in the credit markets. The agency had been making about $500 million in loans every year to about 4,000 or 5,000 homeowners but that activity ceased.
Riley said the suspension has prevented the agency from offering new low-interest loans to help struggling homeowners refinance their mortgages.
The budget repair plan unveiled Wednesday by Gov. Jim Doyle would authorize the agency for the first time to offer those loans to replace sup-prime mortgages made between 2002 and the end of 2007.
Source:http://www.forbes.com/feeds/ap/2009/02
