Industry News

States to bail out distressed borrowers

Bond issues will fund mortgage rescue assistance efforts

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Housing finance agencies in New Jersey and Pennsylvania plan to issue bonds to help keep subprime borrowers having trouble making their loan payments stay in their homes. The New Jersey Housing and Mortgage Finance Agency plans to issue $30 million in taxable bonds, and the Pennsylvania Housing Financing Agency plans an initial issuance of $25 million to $50 million, the Philadelphia Inquirer reports. New Jersey residents earning up to $135,000 annually may be eligible for 40-year fixed-rate loans at interest rates of 6.75 percent to 7.5 percent, depending on bond-market pricing, the Inquirer reported. The program will serve existing homeowners paying higher-than-market-rate interest, or with adjustable or interest-only loans that they can't afford. Pennsylvania, which created a Homeowners' Emergency Mortgage Assistance Program more than 20 years ago, is creating an additional workout program for loans where the principal exceeds the appraised value of a home, the Inquirer said. Oh...