Interest rates on a 30-year fixed mortgage dropped to 3.94
percent for the first time last week, according to Freddie Mac.
There are nearly 19 million loans guaranteed by both
mortgage-finance companies Fannie Mae and Freddie Mac in which borrowers pay interest rates above 5.0
percent that could benefit from refinancing, the senators
wrote.The bipartisan group, led by Senators Barbara Boxer and
Johnny Isakson, sent the letter to Treasury Secretary Timothy
Geithner, Department of Housing and Urban Development Secretary
Shaun Donovan, Federal Housing Finance Agency Acting Director
Edward DeMarco and National Economic Council Director Gene
Sperling.The Obama administration is working with FHFA to ease rules
to make refinancing more accessible under its two-year old
initiative called the Home Affordable Refinance Program, or
HARP. The program is open to borrowers whose loans are backed
by Fannie and Freddie and are having trouble making loan
payments since they owe a large portion of their home’s value.Specific changes to HARP are expected in a few weeks,
Geithner told lawmakers on Capitol Hill.The group of lawmakers said they support improvements to
HARP that address hurdles that have limited its success,
“including representations and warranties, mortgage insurance,
and high lender origination fees.”“All of these changes can be accomplished administratively
and we urge that you take immediate steps to do so,” the letter
stated.
