“It’s a plan that has the support of independent, nonpartisan economists and leaders across the housing industry, but Republicans in Congress worked to keep it from even getting to a vote.”
President Barack Obama recently devoted his weekly address to an expansion of his Home Affordable Refinance Program (HARP) to make refinancing to record low mortgage rates more accessible to more homeowners.
His plan, “The President’s Refinance Plan,” languishing in the hands of a despised, do-nothing Congress since February, would cut red tape and give every responsible homeowner the chance to save about $3,000 a year on mortgages – more than $20,000 a year for high mortgage balances.
The proposal would target homeowners who have been unable to qualify for Home Affordable Refinance Program (HARP), which is only available to those holding Fannie Mae- or Freddie Mac-backed loans.
HARP has been improved, but those who don’t have Freddie and Fannie-backed loans would have a Federal Housing Administration (FHA) option. FHA loans are also insured by the federal government.
The plan also includes a streamlined refinance process for homeowners current on their mortgage – no tax forms and no appraisals – especially for underwater homeowners who’ve been locked out of refinancing.
The President’s plan calls for both 20-year and 15-year mortgage refinancing for homeowners who can afford what could be a larger payment, as well as the conventional 30-year mortgage.
Shorter term loans could help homeowners build equity faster and save GSEs more than the closing costs GSEs sometimes pay under the current refinance programs, according to a White House spokesman.
The President’s plan also is a lot like the “Responsible Homeowner Refinancing Act of 2012,” legislation introduced by U.S. Senators Robert Menendez (D-NJ) and Barbara Boxer (D-CA).
Both are blueprints for the so-called “HARP 3.0.”
“It’s a plan that has the support of independent, nonpartisan economists and leaders across the housing industry, but Republicans in Congress worked to keep it from even getting to a vote. And here we are – seven months later – still waiting on Congress to act,” said the President during his weekly address.
“This makes no sense. Last week, mortgage rates were at historic lows. But instead of helping more and more hardworking families take advantage of those rates, Congress was away on break. Instead of worrying about you, they’d already gone home to worry about their campaigns,” Obama added.
The President’s infographic below says the measure could help as many as 12 million homeowners. Click to enlarge.
For quick reads, see more DeadlineNews.Com infographic stories.