HUD Secretary Donovan Calls for Expanded Refinancing

By Elizabeth Vlock

Secretary of Housing and Urban Development Shaun Donovan spoke before the Senate Committee on Banking, Housing, and Urban Affairs Tuesday to discuss a proposal that would allow borrowers, without Federal Housing Administration (FHA) or Government Sponsored Enterprises (GSEs), to access low-cost refinancing on their mortgages.

This proposed legislation is designed to create a more competitive housing market allowing borrowers, who meet certain criteria, to take advantage of the lowest interest rates in fifty years. Secretary Donovan’s proposal advocates for state funding to areas with high foreclosure rates to help borrowers rebuild equity.

Under the current system, millions of borrowers who have kept up with their mortgage payments are still subjected to high interest rates without the ability to refinance. This leaves responsible borrowers unable to take advantage of refinancing options that those who have GSE and FHA-backed loans have access to.

With some banks unwilling to assume the risks associated with allowing borrowers to refinance, many Americans are left without the opportunity for relief that those with government-backed loans can obtain. Donovan’s proposal intends to eliminate this disparity and save borrowers thousands of dollars a year.

“[It's a] streamlined process designed to make it simpler and less expensive for borrowers and lenders to complete the refinance transaction,” Donovan said in his opening statement.

Sen. Robert Menendez (D-N.J.) is currently working on drafting legislation that is designed, “to remove the barriers preventing borrowers current on their payments from refinancing their loans.”

About TRNS Washington Desk

View all posts by TRNS Washington Desk
TRNS Washington Desk
News updates from on and around Capitol Hill.
  • Anonymous

    This new 123 Refinance could serve as a lifeline for many of the 2 million homeowners in the US estimated to owe more than the value of their property

LISTEN: The Weekend Ahead – November 1-3

The Day Ahead Logo

A new UN-backed climate change report, elections in rebel-held Ukraine and FIFA discusses rescheduling the 2022 Qatar World Cup to avoid 117ºF summer heat.

Virgin Galactic Space Ship Crashes In Test Flight

An in-flight anomaly caused a loss of the vehicle over the Mojave Desert.

DoD Civilians Given Guidelines On Ebola

Civilians personnel can either self-monitor or volunteer to go into a 21-day quarantine.

Pew: Latinos Likely to Vote Democrat, Despite No Immigration Reform

Hispanics still trust the Democratic Party more than the GOP to handle other issues besides immigration reform, according to a Pew study.

LISTEN: The World in 2:00 – October 31, 2014

The World in 2:00 continents logo

Leadership change in Burkina Faso, Hungary’s prime minister scraps a proposed internet tax and a Russian film star “visits” the front lines of eastern Ukraine.

Interview: A New Frontier In Preventing Prescription Drug Deaths

TRNS interviews Daniel L. Cohen, Forum Chair of the US Abuse Deterrent Coalition