Letter to Director DeMarco Calls for Swift Action to Allow Homeowners to Take Advantage of Record Low Interest Rates
U.S. Senators Johnny Isakson, R-Ga., and Barbara Boxer, D-Calif., today urged the Federal Housing Finance Agency (FHFA) to expedite its efforts to help millions of responsible homeowners refinance so that borrowers can take advantage of today's record low interest rates.
In a letter to FHFA Acting Director Edward DeMarco, the senators pointed to recent news that demonstrates the need for urgent action: Last week, interest rates for 30-year home mortgages hit 4.09 percent -- the lowest rate in 60 years. At the same time, new figures show that foreclosures continue unabated and millions of borrowers who are "underwater" on their homes remain stuck with above-market interest rates and would benefit from refinancing.
The Federal Housing Finance Agency recently announced that it had already begun a review of ways to help more homeowners refinance. Senators Isakson and Boxer urged Director DeMarco to move swiftly to complete this review and announce the steps the agency will take to help homeowners avoid foreclosure and save thousands of dollars by refinancing.
"Every day, more struggling homeowners fall behind on their payments," the senators wrote. "We urge you not to delay further and ask that you provide us a timeline of expected next steps."
Senators Isakson and Boxer have been urging action to help non-delinquent borrowers refinance and have sponsored the Helping Responsible Homeowners Act, a bipartisan bill that would help up to two million Americans refinance at lower rates.
The full text of the letter is below:
September 20, 2011
The Honorable Edward DeMarco
Federal Housing Finance Agency
1700 G Street, NW
Washington, DC 20552
Dear Acting Director DeMarco:
We were heartened by your statement following the President's speech to the Congress that you are moving toward reducing the barriers that are keeping millions of homeowners from refinancing to take advantage of record low interest rates.
News from this past week alone underscored the importance of moving quickly:
* Interest rates for 30-year home mortgages dropped to 4.09 percent -- the lowest rate in 60 years.
* CoreLogic reported that nearly 75 percent of the 10.9 million borrowers with negative equity also have "above market rates" and could benefit from a refinance. If the same is true for borrowers in loans backed by Fannie and Freddie, that would equal 3.75 million underwater homeowners paying more than they should.
* Foreclosures continue unabated. According to RealtyTrac, first-time default notices surged nationally in August as filings were issued on 78,880 homes, a nine month high and an increase of 33% from July.
Together, these statistics paint a picture of homeowners desperate for help. While we continue to pursue our bipartisan bill to reduce barriers that have trapped responsible borrowers in higher interest loans, taking such steps administratively would provide immediate relief to these borrowers.
Doing so would be good not only for homeowners, but also for Fannie Mae and Freddie Mac. The Congressional Budget Office has indicated that implementing the provisions in the Helping Responsible Homeowners Act or other similar approaches would save the agencies hundreds of millions of dollars.
Every day, more struggling homeowners fall behind on their payments. We urge you not to delay further and ask that you provide us a timeline of expected next steps.
Thank you, and we look forward to your response.
United States Senator
United States Senator