WASHINGTON, D.C. (WAOK)-President Obama’s announcement today of a new plan to help homeowners who are not late paying their mortagages won praise from U.S. Senators Barbara Boxer (D-CA) and Johnny Isakson (R-GA) today. The president announced the Federal Housing Finance Agency would take new steps to reduce the barriers that have kept millions of responsible homeowners from refinancing and help them take advantage of today’s record low interest rates. The plan includes key elements proposed by Boxer and Isakson in their bipartisan Helping Responsible Homeowners Act.
Senator Boxer said, “I am very pleased that the administration is taking these steps to help responsible homeowners refinance at historically low interest rates. Allowing these homeowners to refinance at today’s record low rates will keep families in their homes and boost the economy by putting thousands of dollars back in the pockets of borrowers. I urge FHFA to move swiftly to assure that these new policies will help as many homeowners as possible.”
Senator Isakson said, “This is a positive step in the right direction for the preservation of homeownership for those Americans who have been making their payments and met their obligations. They deserve the benefit of today’s lower interest rates.”
The reforms announced today by the Federal Housing Finance Agency (FHFA) are aimed at helping the millions of borrowers with non-delinquent Fannie Mae or Freddie Mac-backed mortgages. Changes include eliminating risk-based fees on loans for which Fannie and Freddie already bear the risk and removing refinancing limits on underwater properties – two significant components of S. 170, the Helping Responsible Homeowners Act.
Mark Zandi, chief economist at Moody’s Analytics, has estimated that the new plan could help an additional 1.6 million homeowners refinance by the end of 2013. By refinancing at today’s low rates, the average homeowner – with a $150,000 loan – could save $1,600 a year.
Interest rates remain near historically low levels, at 4.11 percent for a 30-year fixed mortgage. More on the president’s announcement