Senators press for mass mortgage refi plan
A group of 16 senators sent a letter to regulators Tuesday, pressing for a plan to boost mortgage refinancing for more homeowners as soon as possible. Such a plan is being widely discussed admittedly, and now the lawmakers are ready to see some action. "Time is of the essence and we urge you to act quickly and aggressively to ensure that responsible homeowners receive the full benefit of these lower rates," the senators said in the letter to Treasury Secretary Timothy Geithner, Department of Housing and Urban Development Secretary Shaun Donovan, Federal Housing Finance Agency Acting Director Edward DeMarco, and National Economic Council Director Gene Sperling. In September, President Obama said his administration was working on a plan, as part of his larger jobs bill, to eliminate fees and negative equity restrictions to refinance Fannie Mae and Freddie Mac mortgages. The FHFA is considering changes to the Home Affordable Refinance Program to get there. Already, the two are experiencing a refinance boom as the average mortgage rates slipped below 4% to a new all-time low. According to the senators, there are nearly 19 million mortgages guaranteed by Fannie and Freddie with interest rates above 5%. Senators Barbara Boxer (D-Calif.), Johnny Isakson (R-Ga.) and Robert Menendez (D-N.J.) led the letter Tuesday, pointing to their bill introduced earlier in the year that would remove the loan-to-value limits, loan-level price adjustments and second-lien holders from the refinancing process. "All of these changes can be accomplished administratively and we urge that you take immediate steps to do so," the senators said. "We also support efforts to address other hurdles that have limited the success of current refinance programs, including representations and warranties, mortgage insurance, and high lender origination fees." At the Mortgage Bankers Association annual conference in Chicago Tuesday, HUD Secretary Shaun Donovan said a plan would be coming in the next few weeks, just as Geithner said before Congress last week. More than 13 million homeowners have refinanced their mortgage since 2009, he said, translating to close to $20 billion in savings. "With HARP responsible for less than 1 million refinancing and mortgage rates below 4%, we need to pick up the pace. We've been engaged in intense discussions with FHFA, lenders, mortgage insurers and investors to enhance the program and increase its reach," Donovan said. "We hope to have a plan ready in the next couple of weeks, and we need you to use your resources and your focus to this effort as well." Write to Jon Prior. Follow him on Twitter @JonAPrior.