WisBusiness: WHEDA chief says ‘no easy answer’ to foreclosure woes

By Brian E. Clark
WisBusiness.com

There’s “no easy answer” to reverse the rising number of foreclosures in the state, but the Bush administration plan to help homeowners is one good step, says Wisconsin Housing and Economic Development Agency chief Antonio Riley.

“This is a problem that is far-reaching, but there are many ways that we can start to address it,” Riley says in the advance text of a noon speech set to be delivered today at a foreclosure conference in Waukesha. The speech comes a day after an interest rate cut and a stock market dive tied to the national housing slump and mortgage problems.

“We hope that what will come out of this conference is an understanding of all the resources that are available, so people from the banking industry, real estate professionals, government entities, and counselors all are able to play a significant role in responding to the rise in foreclosures,” he said.

According to figures released Monday by ForeclosuresWI.com, there were 2,109 foreclosures filings in the state during November, up from 1,605 for the same month last year – an increase of 31.4 percent.

And for the first 11 months of 2007, 19,122 homes here went into foreclosure for an increase of 29 percent over the same period last year, according to the site.

In his talk, Riley discusses how his agency has helped direct homeowners to “trusted lenders” through a program called HOPE – because they could not pay rising adjustable-rate mortgages (ARMs).

WHEDA formed a partnership with NeighborWorks America, Housing Resources Inc., NeighborWorks Green Bay, and the Housing Preservation Foundation to promote a national foreclosure assistance hotline – 1-888-995-HOPE. The partnership also includes lenders and real estate professionals from across the state — all listed at www.WisconsinForeclosureResource.com.

Riley also boasts how WHEDA is making loans totaling $500 million each year to roughly 5,000 first-time homeowners. Since 2003, the agency has written 23,000 loans, worth $2.3 billion, a 28 percent increase in the number of loans from the previous five-year period, and a 92 percent increase in the dollar volume.”

He said he is also proud that the foreclosure rate on those loans is four-tenths of one percent for November.

Riley says he supports Bush administration efforts, including:

• The HOPE NOW alliance, which supports the state’s 1-888-995-HOPE number;

• Regulatory actions intended to make the mortgage industry more transparent;

• A 2008 budget request to Congress for $120 million for NeighborWorks, and another $50 million for HUD’s mortgage counseling program;

• Giving states and cities the authority to issue tax-exempt mortgage bonds to refinance existing loans;

• And freezing rates for individuals who are in a subprime ARM.

In Wisconsin, about 6 percent of all home loans are subprime ARMs, which would be eligible for the proposed freeze under the Bush administration plan. As of the end of September, 14 percent of those were in foreclosure, according to WHEDA.

But Riley also cautions that the steps at the state and national level need to be “reasonable and thoughtful. We do not want to take action that will lead to problems in other parts of the housing market.

“Nor do we want to take steps that will reduce resources available to people with good credit who would otherwise be able to purchase a home.”