U.S. Senators Barbara Boxer and Johnny Isakson (R-GA) today told members of the Senate Banking Committee that their legislation, the Helping Responsible Homeowners Act, would boost economic growth and keep more Americans in their homes by helping up to 2 million non-delinquent homeowners refinance their mortgages at historically low interest rates.
Testifying before the Banking Subcommittee on Housing, Transportation, and Community Development, Boxer and Isakson said their bill, S.170, reduces barriers to refinancing for the millions of responsible homeowners who are current on their payments, but “underwater” on their homes because the value of their home is now less than the amount they owe on the home.
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According to CoreLogic, 22.7 percent of all American homeowners with a mortgage are underwater. The legislation would save American families thousands of dollars and result in up to 54,000 fewer defaults, producing a net savings of up to $100 million for Fannie Mae and Freddie Mac.
Interest rates for 30-year home mortgages are currently at 4.12 percent, the lowest rate in 60 years. Yet of the 27.5 million mortgages guaranteed by Fannie Mae and Freddie Mac, more than 8 million still carry an interest rate at or above 6 percent.
Senator Boxer said, “This bipartisan bill will help millions of Americans who are stuck in higher interest-rate mortgages to refinance at today’s historically low rates. The economic turnaround is being slowed by the housing crisis and helping responsible homeowners to refinance will save borrowers thousands of dollars, strengthen our economy and keep families in their homes.”
“I am pleased to join Senator Boxer in supporting this legislation because it rewards responsible homeowners who are current on their mortgage but whose homes are ‘underwater’ because of the lagging economy,” said Senator Isakson, who has more than three decades of experience in the housing industry. “By removing the barriers that have kept these responsible homeowners trapped in higher interest rate loans, it would put thousands of dollars back in the pockets of struggling families and have a direct impact on the housing market.”
President Obama outlined a similar proposal in his jobs speech before Congress last week. Following the President’s speech, the Federal Housing Finance Agency announced that it will work to identify and reduce barriers to refinancing for millions of American homeowners who are current on their mortgage payments but underwater on their homes.