10.10.12 Costa Announces Legislation to Help Homeowners Refinance

Calls for Action while Interest Rates Remain Historically Low


Fresno, CA – Congressman Jim Costa rolled out legislation today with Fresno realtors that will allow responsible homeowners to take advantage of current low interest rates on mortgages. The Responsible Homeowner Refinancing Act aims to remove barriers that keep homeowners from refinancing and level the playing field to allow banks to compete for borrowers' business.


“Homeowners who have played by the rules deserve the opportunity to access current low interest rates,” said Costa. “We cannot continue to allow our economy and housing market to limp along the road to recovery. Now is the time for common sense solutions that put our families and communities first; my Responsible Homeowner Refinancing Act does just that.”


There are nearly 13.5 million Americans who currently hold mortgages backed by Fannie Mae and Freddie Mac that could benefit from refinancing. Recent changes to the Home Affordable Refinance Program (HARP) have offered some relief, but many barriers still exist that keep millions trapped in higher interest loans. The Amherst Securities Groups found in a recent study that HARP borrowers were paying more than half a percentage point higher than borrowers with other types of loans.


“The California Association of Realtors® (C.A.R) thanks Congressman Costa for introducing this important legislation that will help millions of struggling homeowners refinance into affordable mortgages,” said C.A.R. President LeFrancis Arnold.  “Allowing responsible homeowners to refinance will ensure (HARP) can be used to its fullest potential and reach every homeowner it was intended to reach.”


In Costa’s Congressional District, up to 26,000 borrowers could save up to $2700 each year and up to 1.5 million borrowers throughout the state of California could see the same level of savings. The Federal Reserve Bank of New York has estimated that for every dollar a borrower saves in monthly payments by refinancing, nearly 50 cents of those savings is spent and helps stimulate the economy. It is estimated that up to 12 million borrowers nationwide could save a collective $34 billion per year through refinancing should this bill become law.


“With this legislation, we’re protecting homeownership and taxpayer dollars at the same time,” said Costa. “Fewer foreclosures and defaults isn’t just good for our neighborhoods, it reduces the risk of Freddie and Fannie needing additional taxpayer assistance. It’s a win-win for families, our Valley economy, and our nation’s fiscal health.”


Dan Hawkins, President - Fresno Association of REALTORS, added, "This is a wonderful addition to the current HARP program.  It will assist homeowners including those with GSE loans to lower the interest rate and stay in their homes. This will benefit many borrowers who were not able to previously refinance.”  


Specifically, the bill eliminates hurdles to refinancing for homeowners who:


·       Cannot afford upfront fees or the cost of appraisals.

·       Have too much or too little equity to qualify for HARP.

·       Have a second mortgage and currently cannot refinance.

·       Have mortgage insurance and currently cannot refinance.


Costa’s bill is the House companion to legislation that has been championed in the Senate by Sens. Barbara Boxer and Robert Menendez. As interest rates are expected to remain low, support has been growing for this legislation that would help reduce foreclosures, keep families in their homes, and protect taxpayer dollars.


The Responsible Homeowner Refinancing Act has been endorsed by a broad coalition of groups representing borrowers, lenders, and financial institutions including the National Association of Realtors, California Association of Realtors, California Association of Mortgage Professionals, National Association of Hispanic Real Estate Professionals, Mortgage Bankers Association, and the National Association of Home Builders, among others.


Click here for a PDF of the bill.