Statement: Congresswoman Jackie Speier On Decision of FHFA, Fannie Mae, Freddie Mac To Spur Refinancing Of Underwater Mortgages
Washington, DC - Congresswoman Jackie Speier (D-San Francisco/San Mateo) released the following statement today in response to the decision of FHFA to allow underwater homeowners to refinance their mortgages:
“Finally, relief for the middle class families of America! I applaud the FHFA for taking bold and needed action. I and many of my colleagues had appealed directly to Mr. DeMarco, the head of FHFA, to take these actions to refinance middle class America, and he has responded. In particular, the decision not to put a cap on the loan-to-value ratio that is eligible to be refinanced via a fixed rate mortgage will mean that potentially millions of homeowners will be eligible. Given that Fannie and Freddie are owned by taxpayers, this decision is a win for them as well. There are reduced odds of losses from the guarantees issued by these two agencies, and there is no cost to taxpayers because Fannie and Freddie will fund this refinancing activity through new bonds. If the wave materializes, it could also help to stabilize the housing market in neighborhoods where refinancing occurs frequently, and could potentially put thousands of dollars into the pockets of a strapped homeowner who refinances. All in all, I only wish that this process could begin immediately, but I understand that banks aren’t set up to handle a wave of applicants. Hopefully, competition between lenders will force them to participate in this new program and drive them to get set up rapidly."