Wisconsin: No More Money, No More Loans
The national credit crisis strikes again; Wisconsin's affordable-housing agency stopped making loans Thursday, because of its inability to raise the money to fund mortgages, reported the Chicago Tribune. The Wisconsin Housing and Economic Development Authority was created in 1972 to offer loans to first-time homebuyers with moderate incomes. All states are having difficulty in issuing mortgage-backed revenue bonds and other states have also seen a halt or decrease in loan availability, said Garth Rieman, director of housing advocacy for the National Council of State Housing Agencies, according to the Chicago Tribune. "We don't know how long it is going to last," Reiman said. "We think many (housing finance agencies) are making loans from bonds that they have issued previously. Others have been able to use other resources available to them." It's clear that Wisconsin isn't the only state facing financial difficulties. In the wake of California's plea for a $7 billion emergency loan from the federal government Friday -- claiming that the state “is not out of the woods yet” and in a few weeks could run out of cash to pay for even basic services -- the notion of this as an emerging trend may not be too far off. Creditors, hit hard by the economic turmoil, are not providing the short-term financing that governments typically rely on until tax revenue is collected. WHEDA Spokeswoman Kate Venne said she is hopeful the rescue plan will help to mend Wisconsin's woes, making them short-lived, while skeptics aren't sure the bailout will be the cure -- at least not immediately. "There are other programs out there for first-time buyers," said real estate agent Ron Jones of Keller Williams Realty in Wausau, Wis. "The sky isn't falling." Disclosure: The author held no relevant positions when this story was published. Indirect holdings may exist via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade. Editor’s note: To contact the reporter on this story, email email@example.com.