By Patric Hedlund
Writing “time is of the essence,” U.S. Senator Barbara Boxer (DCA), joined with 15 others from both parties in the U.S. Senate to urge the Obama administration to quickly implement reforms to help millions of responsible homeowners refinance at today’s all-time low 3.94 percent interest rates.
The senators called upon federal housing regulators to lower barriers keeping borrowers “trapped in higher interest loans.” They said that the savings could “put more than $2,000 a year in a family’s pocket, and give a lift to an economy still burdened by the drop in housing prices.”
The letter suggested removing loan-to-value limits, to give atrisk borrowers an alternative to walking away from their mortgage; eliminating loan level price adjustments (up-front, riskbased fees that make a refinance less affordable and ‘cannot be justified on loans on which Fannie and Freddie already bear the risk’); and ensuring that second lien holders do not stand in the way of a refinance.
“All of these changes can be accomplished administratively and we urge that you take immediate steps to do so,” the senators wrote, also supporting efforts to remove other hurdles limiting current refinance programs, including representations and warranties, mortgage insurance and high lender origination fees.
This is part of the October 14, 2011 online edition of The Mountain Enterprise.
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