Senator Barbara Boxer, D-Calif., is pressing the GSE regulator to adopt several changes to the Home Affordable Refinancing Program (HARP), allowing Fannie Mae and Freddie Mac to refinance more underwater borrowers.
California boasts more troubled loans than any other state in the nation.
Several months ago, the California senator introduced legislation (S. 170) that would eliminate a cap on refinancing underwater borrowers and reduce the risk-based fees the GSEs charge borrowers.
At the time, Boxer asked Federal Housing Finance Agency (FHFA) acting director Edward DeMarco to take administrative actions to implement the HARP changes outlined in S. 170.
In an Aug. 25 letter, the senator renewed her request. "I understand that White House officials are now examining steps that mirror the approach of S. 170, but I am still waiting to receive a response from you to my original request which I reiterate today - that FHFA immediately implement our approach." the letter said.
Sen. Johnny Isakson, R-Ga., is a co-sponsor of the bill which is aimed at helping underwater borrowers take advantage of lower mortgages rates to reduce their monthly mortgage payments.
FHFA declined to comment on Boxer's request or its views on expanding the HARP program. "We've received the letter and will respond to the Senator," a FHFA spokeswoman said.
Earlier this week National Mortgage News broke the news that the White House is contemplating a major government sponsored refi effort to aid underwater borrowers and the housing market.
Currently, the HARP program allows Fannie and Freddie to refinance borrowers with loan-to-value ratios above 105% to 125%. The Boxer-Isakson bill would eliminate that cap entirely.
Since its launch in April 2009, HARP has refinanced 47,500 underwater borrowers.
In her letter, Boxer noted that "experts tell us" the HARP changes would "reduce defaults and result in a net savings for Fannie Mae and Freddie Mac."