NAACP Urges Passage Of Congressional Measure To Make It Easier For Homeowners To Refinance
MEASURE COULD HELP UP TO UP TO 13 MILLION AMERICANS STAY IN THEIR HOMES
Too many American homeowners today find themselves paying unnecessarily high mortgages every month. In fact, since the recession first hit more than 5 years ago, many homeowners find themselves “underwater”; in other words, the present day appraised values of their homes is less than what they owe on their mortgages. The latest estimates are that 16 million homes across the country, occupied by about 40 million people, currently find themselves “underwater.” Furthermore, the average rate for a 30-year mortgage is currently about 3.8%. Among homeowners with a 30-year fixed-rate mortgage guaranteed by Fannie Mae and Freddie Mac, nearly 70% have an interest rate of 5% or higher.
Sadly, there are a number of obstacles facing Americans who wish to refinance, including unnecessary paperwork, high fees and restrictive requirements. This results in a needless drain on family income and a continuing drag on the housing market. By eliminating these barriers, Congress would be taking an important first step toward making refinances more accessible and helping families stay in their homes.
Legislation to help alleviate the problems facing too many American families hoping to refinance their homes, S. 3522, was introduced by Senators Robert Menendez (NJ) and Barbara Boxer (CA) on September 10, 2012. By making it easier to refinance into today’s low interest rates, S. 3522 would expand the Home Affordable Refinance Program (HARP) so it helps up to 13 million Americans nationwide save $35 billion. Specifically, S. 3522 would expand and simplify the HARP program to help more homeowners refinance their mortgages by eliminating loan-to-value restrictions and allowing all loans guaranteed or owned by Fannie Mae or Freddie Mac to be refinanced if the mortgage is current; waive borrower appraisal costs and upfront fees; and increase competition among lenders for refinance business.
Research shows that today’s constraints on refinancing have a disproportionate impact on middle-class borrowers whose original mortgages were under $200,000. This bill would more than double the number of homeowners who could refinance under the HARP federal mortgage program and more than double their potential savings. Refinance savings would mean more money in consumers’ pockets, fewer foreclosures and a stronger economy.
S. 3522 is clearly a step in the right direction. The NAACP also supports measures including principal reduction to help homeowners who are “underwater” and need assistance before being foreclosed upon.
WE MUST URGE CONGRESS TO TAKE IMMEDIATE STEPS INCLUDING THE PASSAGE OF S. 3522 TO HELP HOMEOWNERS WHO ARE PAYING TOO MUCH FOR THEIR MORTGAGES REFINANCE AND AVOID FORECLOSURE IF WE AS A NATION ARE GOING TO MOVE FORWARD AND RECOVER ECONOMICALLY.