SKF and SRS should bounce soon Credit Crisis States Mortgage Relief Programs Aren't Helping Much By RUTH SIMON April 5, 2008; Page A2
As the Senate continues work on its $15 billion mortgage relief bill next week, states will be keeping a close eye on one measure: it would authorize them to issue an additional $10 billion of tax-exempt housing bonds to fund mortgage programs.
Up until now, efforts by states to help distressed homeowners refinance have had negligible results. The new measure would give them additional tools. Still it's unlikely to help them refinance large numbers of borrowers with subprime mortgages.
States currently can sell tax-exempt bonds to finance mortgage assistance to first-time home buyers and those who buy homes located in economically disadvantaged areas. The proposed legislation would allow states to use these bonds to help homeowners refinance as well and allow states to issue more tax exempt bonds to finance their mortgage programs. The additional funds would be allocated on a per capita basis.
Some states are already trying to help. In an effort to stem rising foreclosures, nine states -- including Ohio, Maryland, Illinois and New York -- have started or are preparing to start refinance programs aimed at subprime borrowers facing interest-rate resets, according to the National Governors Association.
The problem, however, is that the refinance programs are turning out to be far less effective than officials had hoped, in part because borrowers seeking state help tend to be in such bad financial shape they don't qualify. Healthier borrowers are bypassing the state programs and seeking other options to refinance their subprime loans, such as the Federal Housing Administration, which has already refinanced 145,000 mortgages in the past seven months. http://online.wsj.com/article/SB120735798800591419.html?mod=todays_us_page_one
Market Data 
Markets 
AI
