Although Democrats have expressed a desire to open the door to refinancing for more borrowers who owe more than their properties are worth, lawmakers have held back from writing a bill.
The draft bill would provide streamlined financing options for homeowners who are current on their payments and have loans owned or guaranteed by Fannie Mae and Freddie Mac , the two government-controlled companies that have been propped up by more than $150 billion in taxpayer aid.
More than 17.5 million borrowers with loans backed by Fannie Mae and Freddie Mac currently pay more than 5 percent interest could be reached, according to the draft, while mortgage rates are averaging under 4 percent currently nationwide.
At a committee hearing, U.S. Secretary of Housing and Urban Development Shaun Donovan endorsed the Democratic effort to encourage refinancing, citing the need to help homeowners take advantage of historically low interest rates and put more cash back into the economy.
"That's something I hope we can all work on, with speed, and get this done." He estimated that "Millions of homeowners" would benefit from the Menendez-Boxer plan, but he declined to be more specific.
[Source: Summary extract of Reuter's report by Margaret Chadbourn. The full report can be read at UPDATE 1-US Senate Democrats push to ease home refinancing | Reuters]
