Bush mortgage plan will help in Weld, lenders say

Maria St. Louis-Sanchez
December 7, 2007

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The new federal plan to help the mortgage crisis will be a help in Weld County, local lenders say.

Steve LaForest, owner of Mortgage Services, LLC, said the Bush plan to freeze rates on certain subprime mortgages for five years will help quell future foreclosures in Weld and give the housing market time to fix itself.

"It will definitely help a lot of people out," he said. "If they can continue their payments as they are now, it will keep them in their homes."

President Bush released his plan Thursday, the day that the Mortgage Bankers Association reported that the number of mortgages entering the foreclosure process in the July-September period set a record.

Weld is on track in 2007 to have about a 35 percent increase in foreclosures from 2006 -- which itself had record-high numbers.

The Bush plan is expected to help families currently able to afford their loans but would be in trouble if their payments went up. The plan would allow borrowers to keep their low "teaser" interest rates for as long as five years.

LaForest said this will help keep the local housing market from being inundated with new foreclosures which would continue to bring down home prices.

"You will have fewer homes on the market, and it will allow us more times to absorb those already on the market," he said.

However, this plan will not solve all of Weld's woes, he said. There are some people who can't even afford their initial interest rates on their home loans.

"It's not a cure-all for everybody," LaForest said. "There will be those who just can't make the payments they currently have and won't be able to keep with it and will probably go into foreclosure."

While the Bush plan might not help everyone, he said it is a step in the right direction.

"Anything that will help keep people in homes longer and keep our real estate market steady will be a positive," he said.

On the county level, the Weld County Foreclosure Prevention Task Force has been meeting for the past few months to see what can be done.

Jeannine Truswell, executive director of United Way of Weld County and a member of the task force, said the task force is still in its beginning stages but is making headway. The task force has been analyzing the services available in Weld and finding out where there might be gaps in services, she said.

She said the task force looks at its duties in a two-pronged approach. First, it will work to help educate people before they are facing foreclosure, and the second piece would be finding services for people who are in crisis and may have lost their homes.

Anyone interested in being a member of the task force should call United Way at (970) 353-4300.

Associated Press contributed to this report.