Menendez, Boxer Introduce Bill To Help Responsible Homeowners Refinance “This bill is a win-win-win -- a win for responsible homeowners who will be able to refinance at record-low rates, a win for mortgage lenders who will enjoy an influx of new business,
PoliticalNews.me - May 13,2012 - Menendez, Boxer Introduce Bill To Help Responsible Homeowners Refinance
The Responsible Homeowner Refinancing Act of 2012 a Key Part of President Obama’s “To Do List”
Washington, D.C. – U.S. Senators Robert Menendez (D-NJ) and Barbara Boxer (D-CA) introduced legislation to help millions of responsible homeowners refinance at lower rates and save thousands of dollars each year – a measure that would help check off a main element of President Obama’s “to do list” for Congress. Earlier this week, Obama called on Congress to act on a number of measures to create jobs and restore security for middle class families, including housing refinance legislation. The President will underscore the importance of helping homeowners refinance when he travels to Nevada tomorrow.
“I agree with President Obama’s ‘to do’ list to create jobs and strengthen our middle class,” said Senator Menendez. “That’s why Senator Boxer and I are introducing legislation today to clear the way for responsible homeowners to refinance and lower their mortgage rates. It will put thousands of dollars back in the pockets of hard working families and boost our economy. There’s no reason why we can’t move this bill to our ‘done’ list quickly.”
“This bill is a win-win-win -- a win for responsible homeowners who will be able to refinance at record-low rates, a win for mortgage lenders who will enjoy an influx of new business, and a win for communities and our economy, which will benefit from additional refinances that will be made possible by this bill,” Senator Boxer said. Moody’s Analytics Chief Economist Mark Zandi has projected that the bill will result in three million additional refinances.
The average rate for a 30-year mortgage is 3.83 percent – a rate that is historically low. Nevertheless, there are 17.5 million homeowners with loans guaranteed by Fannie Mae and Freddie Mac paying interest above 5 percent, many of whom cannot refinance at a lower rate because of unnecessary red tape and high fees. That red tape has prevented competition among banks, so borrowers end up paying higher interest rates than if they were able to shop around.
Under the Administration’s current refinancing program (HARP), an average homeowner saves about $2,500 per year. This bill would increase the amount they could save and would likely expand the pool of eligible borrowers by several million.
The Responsible Homeowner Refinancing Act of 2012 removes the barriers preventing these Fannie Mae and Freddie Mac borrowers from refinancing their loans. The bill would:
• Extend streamlined refinancing for all Fannie and Freddie borrowers regardless of how much they owe compared to the value of their home
• Eliminate up-front fees completely on refinances
• Eliminate appraisal costs for all borrowers
• Remove additional barriers to competition
• Require second lien holders and mortgage insurers who unreasonably block a refinance to pay a fine
• Pay for itself since reducing homeowners’ mortgage payments also reduces default rates and foreclosures, reducing Fannie and Freddie’s reliance on taxpayer bailouts. So the bill is good for both taxpayers