Washington, DC / Bilingual Weekly
Despite all “feel-good” reports about a recovering economy, the San Joaquin Valley remains as Ground Zero for both unemployment and home foreclosures.
Thus a new U.S. Senate Bill seeks to help borrowers who continue to make their mortgage payments on time, but whose homes have lost value during the real estate crisis.
California Senator Barbara Boxer’s Helping Responsible Homeowners Act of 2011 promises to remove barriers that are preventing non-delinquent borrowers from refinancing their mortgages and taking advantage of historically low interest rates. There are several existing refinancing programs offered to such homeowners. However, participation has been low, because they must pay high, risk-based fees up front to refinance their loans. These additional fees can be as high as two percent of the loan amount, or an extra $4,000 on a $200,000 loan.
“At a time when millions of Americans have been forced out of their homes, this legislation will ensure that homeowners who make their payments on time will be able to refinance their mortgages at current low rates so they can stay in their homes,” said Boxer, “another benefit will be more disposable income at a time when our economic recovery needs a boost in consumer spending.”
Boxer’s bill will eliminate risk-based fees on loans —such as those where lender Fannie and Freddie already bear the risk; Remove refinancing limits on underwater properties; Make it easier for borrowers with second mortgages to participate in refinancing programs; and require that borrowers are able to receive a fair interest rate, comparable to that received by any other borrower in good standing who has not suffered a drop in home value and has stayed current with their mortgage payments.
Boxer’s bill mirrors key aspects of Congressman Dennis Cardoza (CA-18) foreclosure-prevention bill, the Housing Opportunity and Mortgage Equity (HOME) Act, H.R. 363. “Both bills are far-reaching legislation designed to stop the onslaught of foreclosures that continues to devastate communities in California and nationwide,” said Cardoza.
Refinancing would significantly lower the homeowner’s monthly mortgage payments, resulting in fewer foreclosures, and stabilizing the housing market and our economy.