| 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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Rural homes foreclosed, but not near number of urban, suburban home ...
Foreclosures, which have roiled housing markets across the state and the nation, have had a smaller impact in Pennsylvania's rural communities, where subprime loans were rare and lenders and borrowers work hard to avoid defaults. "Because of the nature of the rural buyer, they tend to be more conservative in how much debt they carry," said Dan Duffy, chief executive officer of United Country Real Estate in Kansas City, Mo., one of the largest rural real estate agencies in the United States. Also, lenders who specialize in serving rural communities keep most of those mortgages on their own books rather than sell them on the secondary market. Thus, they will go to greater lengths to help property owners avoid foreclosure. For the most part, the lenders tend to be small outfits, often nonprofit organizations with relatively few accounts.
Lenders Rethink Home-Equity Loans
Rising delinquencies and falling home prices are putting home-equity lenders and borrowers in a tightening bind. As home values continue to sink, mortgage companies are increasingly walking away from delinquent home-equity loans rather than pushing borrowers into foreclosure. At the same time, some lenders, in an effort to protect against future losses, are looking at scaling back home-equity lines of credit held by certain borrowers who are still making payments. Mortgage companies typically begin sending foreclosure notices when a borrower is more than 90 days behind on payments and can't come up with a plan to resolve the problem. But in many cases, the companies have concluded that they are better off not foreclosing on borrowers who can't make payments on their home-equity loans and other types of second mortgages.
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