Boxer urges White House to enact plan to help homeowners lower their home loan payments

Sen. Barbara Boxer (D-Calif.) is urging the Obama administration to support a bipartisan bill to help homeowners avoid foreclosure.

Boxer reacted Thursday to reports that the White House is considering ways to slow foreclosures that are similar to legislation she offered with Sen. Johnny Isakson (R-Ga.) in July.

The senators’ legislation would help up to 2 million Americans refinance their mortgages that lost value during the recession, at much lower interest rates.

“I am extremely pleased that the Boxer-Isakson legislation is gaining support in Washington, as it has throughout the country,” she said.

Boxer noted that Moody’s Chief Economist Mark Zandi, the National Association of Realtors, the National Consumers Law Center and the National Association of Mortgage Brokers are among those supporting the legislation. 

Boxer also sent a letter Thursday to Edward DeMarco, acting director of the Federal Housing Finance Agency — the group that regulates Fannie Mae and Freddie Mac — urging him to consider implementing the bill’s provisions.

In the letter, Boxer noted that she was pleased to read DeMarco’s comments indicating he was “open to all ideas that provide needed assistance to borrowers.”  

She wrote that the Boxer-Isakson measure has “the dual benefit of saving Fannie [Mae] and Freddie [Mac] money and boosting the economy by giving responsible homeowners who deserve a break but are stuck with high interest rates more money to spend in their communities.”  

The White House is considering several ideas, including a proposal that would allow millions of homeowners with government-backed mortgages to refinance them at interest rates around 4 percent, according to a Thursday story in The New York Times.   

The average rate on 30-year fixed mortgages increased this week to 4.22 percent, up from 4.15 percent last week, the lowest level in 40 years, Freddie Mac said Thursday. 

The average rate on a 15-year fixed mortgage, used a lot in refinancing, was up to 3.44 percent from 3.36 percent, a record low dating back to 1991.

Earlier this month, the FHFA, Treasury and Housing and Urban Development announced they are looking for creative ways to revive the sluggish housing market by selling off certain repossessed properties to investors for rental housing, a move Sen. Jack Reed (D-R.I.) said backs his plan to turn vacant, foreclosed homes into rental units. 

The Boxer-Isakson legislation would do several things, including saving Fannie Mae and Freddie Mac money as a result of lowering the foreclosure rate. It would eliminate risk-based fees on loans for which Fannie and Freddie already bear the risk, removing refinancing limits on underwater properties and making it easier for borrowers with second mortgages to participate in refinancing programs, and it would help borrowers receive a fair interest rate, comparable to one received by any other borrowers in good standing who have not had a drop in home value and have stayed current with their mortgage payments.