Sen. Barbara Boxer (D-Calif.) said the major mortgage refinance program the Obama administration reportedly began developing mirrors her own. According to The New York Times, the Obama administration is developing a plan to help more underwater borrowers refinance their mortgage, granting them relief under historically low rates. Boxer and Sen. Johnny Isakson (R-Ga.) resubmitted S. 170 in June to eliminate refinancing barriers and fees for borrowers with mortgages guaranteed by Fannie Mae and Freddie Mac. Their lack of participation in such major refinancing and principal write-down programs, under the direction of their conservator the Federal Housing Finance Agency, has left many underwater borrowers trapped in their current payments. “I understand that White House officials are now examining steps that mirror the approach of S. 170,” Boxer said wrote in a letter to FHFA Acting Director Edward DeMarco Thursday. She met with DeMarco in June in an effort to persuade him to implement the program administratively and without congressional action. The FHFA has said such a program would boost already steady losses at the GSEs, forcing more bailout funds from the Treasury. Currently, more than 8 million Fannie or Freddie loans carry an interest rate of more than 6%. The Boxer bill would target roughly 2 million borrowers for a refinance into today’s lower interest rate loans, many with loan-to-value ratios above 125%. She claims the program would not cost the FHFA any taxpayer funds and would reduce defaults by keeping these borrowers from walking away. “We’ve received the letter and will respond to the senator,” an FHFA spokesperson said. The Treasury Department declined to comment on the reported program. “As one would expect, we continue to look for ways to ease the burden on struggling homeowners and to help stabilize the market, whether that’s through assessing new proposals or older ones worth re-considering as market conditions change,” the Obama administration said in a statement. “That said, we have no plans to announce any major new initiatives at this time.” Write to Jon Prior. Follow him on Twitter @JonAPrior.
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