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SENATORS REVIVE
REFI BILL
Two U.S. senators have again introduced
legislation aimed at allowing millions of
homeowners who are currently locked in
high-interest-rate mortgages to refinance at
today���s near-record low rates, potentially saving
thousands of dollars a year. Sens. Robert
Menendez (D-New Jersey) and Barbara Boxer
(D-California) reintroduced the Responsible
Homeowner Refinancing Act of 2013 (S. 249) on
February 7 after two failed attempts to push it
through Congress last year.
���We need to bring much-needed relief now
to hard working, responsible homeowners who
are struggling to keep up with their high interest
rate loans,��� Menendez said. ���We need to do
this before interest rates go up again. It���s time
that Congress finally put families first and give
homeowners who have played by the rules a fair
chance to refinance at today���s low rates.���
Under the Home Affordable Refinance
Program (HARP), lenders who want to
compete with borrowers��� current lenders for
refinance business face stricter underwriting
criteria and greater repurchase risk from the
GSEs if a borrower defaults. Menendez and
Boxer contend these different standards have
inhibited competition, resulting in higher prices
and less favorable terms for borrowers. They cite
a recent study by Amherst Securities Group
which found that HARP borrowers are paying
more than half a percentage point above what
borrowers with other types of loans are paying.
The Responsible Homeowner Refinancing
Act would direct the GSEs to require the
same streamlined underwriting and associated
representations and warranties for new servicers
as they do for current servicers, leveling the
playing field for banks to actively compete for
refi business.
The bill also aims to reduce or remove certain
refinance requirements in order to allow more
homeowners to take advantage of low interest
rates. It would ensure borrowers had access to
the same low-cost refinancing no matter how
much equity they had in their home, and it
would eliminate HARP���s employment and
income verification requirements for eligibility
based on the justification that HARP-eligible
borrowers must already be current on their loans
and must have demonstrated a commitment to
paying on time.
In addition, S. 249 would require the GSEs
to develop more streamlined alternatives to
manual appraisals, reducing costs and time for
borrowers and lenders alike. It would also extend
HARP by one year, through the end of 2014.
According to Menendez���s office, the bill
enjoys support from a number of congressional
co-sponsors and industry groups, including
the Mortgage Bankers Association, the
National Association of Realtors, the National
Association of Home Builders, and the Center
for Responsible Lending, among others.
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