Donovan: Refinancing Proposals Would Benefit Economy ...

Topic: Real Estate, Mortgage
Industries: Real Estate
Tags: Real Estate, Mortgage, Home, House, Refinance, Economy
Publication: Mortgage News Daily
Date: May 11, 2012

In a press briefing held in advance of President Obama?s appearance in Reno, Nevada, Housing and Urban Development (HUD) Secretary Shawn Donovan gave a preview of the home refinancing aspects of the President?s ?To Do List? for Congress which he will be discussing further this afternoon.? Donovan also provided updates on the results of last fall?s executive refinancing initiatives.

Donovan said that last October, ?the President had included proposals to increase refinancing in the jobs plan he submitted to Congress.? Ordinarily, the Secretary said, the economy would be receiving an enormous boost from the record low interest rates so refinancing is a critical step in realizing this.? When Congress did not act on the jobs bill the President asked administration officials to identify what could be done without Congressional action to remove barrier to refinancing.? Within six weeks, Donovan said, five barriers were identified and the administration moved to remove or mitigate them.

The result has been a 50 percent increase in refinancing applications, roughly one in three of which is for a HARP loan, up from one in ten a year ago.? The increase has been even greater in areas hardest hit by price declines and foreclosures.? According to data from the Mortgage Bankers Association, refinancing applications are up 240 percent in Nevada, 180 percent in Arizona, and 125 percent in Florida and informal surveys suggest that two of every three refinancing applications in the hardest hit states are for HARP loans.

In January?s State of the Union Address the President laid out the final steps aimed at those borrowers who are doing everything right but still cannot refinance and this week there were three bills introduced in Congress to implement the rest of the President?s program.? The first, introduced by Senators Menendez and Boxer, would remove the barriers remaining for some 12 million borrowers with government-backed mortgages.? The legislation would help borrowers with second liens, cut red tape and costs such as eliminating manual appraisals, and would increase competition.

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