On the recordJanuary 25, 2011
I rise today to introduce the Helping Responsible Homeowners Act of 2011. This legislation will eliminate barriers that have prevented millions of borrowers who continue to make their payments on time from taking advantage of historically low interest rates and refinancing their mortgages. Despite a recent uptick, interest rates for 30-year home mortgages remain at historically low levels--under five percent. Yet of the 31.5 million mortgages guaranteed by Fannie Mae and Freddie Mac, nearly 13 million still carry an interest rate at or above 6 percent. This bill would allow non-delinquent mortgages to be refinanced at current rates, putting hundreds of dollars a month back in the pockets of struggling families. The Administration's Home Affordable Refinance Program has resulted in Fannie Mae and Freddie Mac refinancing 520,000 loans through October 2010, far short of its goal of assisting four to five million homeowners. One reason for the program's failure is that Fannie and Freddie continue to charge risk-based fees to refinance a loan they already guarantee. These additional fees can be as high as two percent of the loan amount, or an extra $4,000 on a $200,000 loan. In my home state of California, where prices are higher, that might be $8,000 on a $400,000 loan. For borrowers struggling to keep up with their payments, this is an additional cost they simply cannot afford.
