| Troubled year for housing in Valley
But that might not help her, Hauger said. "She still won't be paying principal on her loan, and home values aren't going to climb enough in two years for her to refinance or sell without taking a loss," she said. 'Foreclosure mess' By late fall, Hauger's group began to see more lenders willing to work with it on foreclosures. But, she said, so far it hasn't been able to stop a foreclosure and get a bad loan restructured. Hauger said she needs another counselor just to work with the agency's foreclosure clients, but there is no money for it. Her group might have been facing layoffs now if it weren't for a $200,000 housing grant it received a few years ago. Earlier this month, national mortgage figures showed foreclosures at a record high. The same day, the White House announced a plan for a five-year freeze on interest rates for certain struggling homeowners with subprime loans.
Broken Dream
Tamika Taylor put everything she had into saving her house. She drained her savings and borrowed from her retirement account to make her mortgage payments. But in the end, she could not keep up with her monthly payment, which had ballooned from $2,400 to $4,000. An auction date was set: Tuesday, Jan. 29. "The market has basically dropped," she said, a week before her home was to be sold. "There's little or nothing you can do except be at the mercy of the mortgage company." Looking back, Taylor admits she made an unwise financial decision. She took out an adjustable-rate home equity loan to pay off some bills and to live off of while she stayed home with her newborn. Like many others, she assumed she would refinance the loan before the higher rate kicked in. But then the market softened, leaving her, and thousands like her, stuck in bad loans.
Help for mortgage market included in stimulus plan
To jump-start slow housing sales, the economic stimulus package proposed in Washington on Thursday aims to get more money circulating in the nation's mortgage markets.
One component is an increase in the maximum loan amount allowable by two government-sponsored entities, which will make it more affordable to buy or refinance a more expensive house.
The cap on loans sold through the secondary market to Fannie Mae and Freddie Mac will be raised from $417,000 to as high as $729,750 for a limited time, according to the office of House Speaker Nancy Pelosi (D-Calif.), who helped negotiate the deal.
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