It looks like there may be some new refinancing initiatives coming down the line in the coming months. Three bills were introduced in Congress this week that are intended to “complete” President Obama’s 2009 State of the Union housing stimulus plan.
The following is from HousingWire:
Speaking on a conference call Friday, [HUD Secretary Shaun] Donovan heralded a bill introduced this week by Dianne Feinstein, D-Calif., that encourages homebuyers who don’t have a Fannie Mae, Freddie Mac or Federal Housing Administration-backed loans to refinance.
“There are about 3.5 million families who are doing the right thing by paying their bills, current on their mortgages, but because they’re underwater and have a private-label securities loan, they have been locked out of refinancing,” Donovan said. “We want to expand refinancing to those families.”
And in an attempt to accelerate the rebuilding of homeowner equity, Senator Jeff Merkley, D-Ore., advanced a bill in which Fannie and Freddie cover the closing costs for some homeowners who are current on their mortgage and seeking to refinance into a 20-year loan term or shorter through HARP. It will save homeowners an average of $3,000 a year.
A third bill would remove the current loan-to-value “floor” for HARP loans, making it possible for more borrowers that have an equity position to take advantage of what amounts to a “streamline” conventional refinance. HARP loans were originally designed to help upside down homeowners with good credit and qualifications take advantage of today’s lower interest rates – often without an appraisal.
This is an election year, so it remains to be seen if these bills will pass. Stay tuned.