Senator Praises Administration for Looking at Further Steps to Ease Housing Crisis and Calls on the Federal Housing Finance Agency to Immediately Implement S.170
Fresno, CA – U.S. Senator Barbara Boxer (D-CA) today reacted favorably to press reports that the Obama Administration is considering new measures to slow down foreclosures and boost the economy by taking steps similar to S.170, the Helping Responsible Homeowners Act. This bipartisan bill will help up to two million Americans to refinance their mortgages at historically low interest rates, keeping them in their homes and boosting economic growth.
Senator Boxer said, “I am extremely pleased that the Boxer-Isakson legislation is gaining support in Washington as it has throughout the country with endorsements from Mark Zandi, the National Association of Realtors, the National Consumers Law Center, the National Association of Mortgage Brokers and many others.”
Boxer also sent a letter this afternoon to Acting Director Edward DeMarco of the Federal Housing Finance Agency (FHFA), which regulates Fannie Mae and Freddie Mac, to follow-up on their meeting earlier this year and to urge him to immediately implement S.170.
In the letter, Senator Boxer noted that she was pleased to read DeMarco’s comments indicating he was “open to all ideas that provide needed assistance to borrowers.” She wrote: “S.170 has the dual benefit of saving Fannie and Freddie money and boosting the economy by giving responsible homeowners who deserve a break but are stuck with high interest rates more money to spend in their communities.” The full text of the letter is available http://boxer.senate.gov/en/press/related/FHFA_08_25_2011.pdf.
Boxer has called her legislation a “no brainer” and a “win-win” because experts have stated that it will help homeowners who deserve a break but are stuck with high interest rates to refinance and spend extra money to help boost the economy. Additionally, it will save Fannie Mae and Freddie Mac money as a result of lowering the foreclosure rate.
Senator Boxer’s legislation is cosponsored by Senator Johnny Isakson (R-GA), and would:
• Eliminate risk-based fees on loans for which Fannie and Freddie already bear the risk;
• Remove refinancing limits on underwater properties;
• Make it easier for borrowers with second mortgages to participate in refinancing programs; and
• Require that borrowers are able to receive a fair interest rate, comparable to that received by any other borrowers in good standing who have not suffered a drop in home value and have stayed current with their mortgage payments.
Interest rates for 30-year home mortgages are at historically low levels. Yet of the 27.5 million mortgages guaranteed by Fannie Mae and Freddie Mac, more than 8 million still carry an interest rate at or above 6 percent. For the average homeowner – with a $150,000 loan – lowering the interest rate by 1 percent would save $1,100 a year. With up to two million additional borrowers refinancing, this would pump up to $2.2 billion annually into the economy. The legislation is also expected to lead to up to 54,000 fewer defaults by homeowners and produce a net savings of up to $100 million for Fannie Mae and Freddie Mac.
It has been endorsed by Mark Zandi, chief economist at Moody’s Analytics, along with the National Consumer Law Center, the National Association of Mortgage Brokers, the California Association of Realtors, the California Association of Mortgage Professionals, William Gross, managing director and co-CIO of PIMCO, and housing economist Thomas Lawler.