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

Hamburg Is Destroyed, Nixon’s “Kitchen Debate”, And Congress Kicks Out Jim Traficant

Here’s what happened today in American political history.

Click here for: Thursday, July 24

● EPA plan for Four Corners haze survives review

● Regulators blitz foreclosure relief scammers

● FOIA suit seeks clemency program documents

● GOP plan raids low-income families

● Human smugglers caught in ICE net

● Birds threatened by football stadium

UN: Rockets Found In Gaza School ‘Have Gone Missing’

595822

The U.N.’s Palestine relief agency said it followed protocol in notifying local Palestinian authorities of the discovered weapons.

Hagel Offers To House Additional Undocumented Children, Extend Base Leases

The Pentagon currently houses 2,500 undocumented children, on three military bases, who have fled Central America where crime is on the rise.

Pentagon: Russia Continues To Supply Weapons To Separatists

Pentagon Spokesman Col. Steve Warren said that Russia continues to supply the Ukrainian separatists with weapons and “includes training on air defense systems.”

IRS Stopped Internal Lerner Email Investigation

“We have gone out of our way not to talk to anyone that they might potentially want to interview about what happened three years ago when the hard drives crashed,” said Koskinen.