Two Democratic senators got to work on President Obama’s “to-do list” for Congress yesterday, introducing a bill to remove refinancing barriers for Fannie Mae and Freddie Mac borrowers.
Sens. Robert Menendez (D-N.J.) and Barbara Boxer (D-Calif.) will introduce this week the Responsible Homeowner Refinancing Act of 2012, which would extend streamlined refinancing for Fannie and Freddie borrowers, eliminate up-front fees completely on refinances, eliminate appraisal costs for all borrowers, and remove additional barriers to competition.
The senators said the bill also would require second lien holders who unreasonably block a refinance to pay restitution to taxpayers and require mortgage insurers who unreasonably fail to transfer coverage to refinanced loans to pay restitution to taxpayers.
Housing and Urban Development Secretary Shaun Donovan supported the measure at a Senate Banking Committee hearing yesterday.
“There’s a real urgency here because interest rates today are at the lowest level they have ever been for a 30–year mortgage,” he said. “But as the economy continues to improve, the expectations are this window of record low interest rates may not last for a long time.”
Sen. Bob Corker (R-Tenn.) indicated that some Republicans may support the bill if changes are made at the committee level.
The GOP is waning against such a bill being quickly pushed to the Senate floor under Obama’s “we can’t wait” mantra.
“I look forward to moving this bill to our ‘done’ list quickly,” Menendez said yesterday.