Calling on Republicans to join them in passing the measure, Boxer and Menendez said recent changes to the Home Affordable Refinance Program (HARP) were a step in the right direction.
But the lawmakers said barriers were left in place that would keep millions of borrowers trapped in high interest loans.
There are nearly 13.5 million responsible borrowers in loans guaranteed by Fannie Mae and Freddie Mac who could benefit from refinancing at today’s low interest rates, Boxer said in a statement. “This bill is a win-win-win.”
“I’ve received thousands of messages from hardworking homeowners back home, including a cancer survivor named Linda who said trying to refinance her mortgage is harder than fighting cancer,” Menendez said. “Homeowners will have more money in their pockets, Fannie and Freddie will see fewer foreclosures, and the housing market and economy will be strengthened,” Boxer noted.
“We applaud senators Boxer and Menendez for reintroducing this bill and recognizing that it benefits all parties involved,” California Association of Realtors president LeFrancis Arnold said.
Other trade groups, from the Mortgage Bankers Association to the National Association of Home Builders, as well as the Center for Responsible Lending, on Monday echoed that support.
Sponsors say the legislation would streamline Fannie Mae and Freddie Mac and make it easier for those who are current on their mortgage payments, but have been previously unable to refinance to take advantage of record-low interest rates.
It waives loan-to-value ratios for well-performing loans to participate in the streamline program and eliminates up-front fees and appraisal costs in the refinancing process. It also sets penalties for second lien holder and mortgage insurers who block the refinance process and improves competition for lenders who want to compete with the existing mortgage handler.