The GSE regulator told House Democrats at a closed door meeting that the Federal Housing Finance Agency is committed to making meaningful changes to a special program that will allow more borrowers with high LTV loans to refinance at lower mortgage rates.
But that didn't satisfy lawmakers who met with FHFA acting director Edward DeMarco Thursday afternoon.
“Our concern with Mr. DeMarco is that if he does everything he said here today, it would affect only a few hundred thousand homeowners in need,” said Rep. Elijah Cumming, D-Md. “We asked him to go back to the drawing board and come back with a more comprehensive proposal.”
FHFA has undertaken a review of the Home Affordable Refinancing Program at the Obama administration's urging and due to the program's limited success in refinancing underwater borrowers with Fannie Mae and Freddie Mac loans.
According to Rep. Cummings who chairs a Housing Stabilization Task Force, FHFA is examining options to increase the 125% loan-to-value ratio cap on HARP refinancings. The agency also is trying to address problems related to refinancing fees, appraisals and representation and warranties. But the regulator did not provide any details during the meeting.
DeMarco issued a statement after the meeting with task member members. “As we are still working on these program enhancements, it is premature to estimate how many borrowers will refinance as a result of these efforts,” DeMarco said.
“Our goal is to provide expanded refinance opportunities for all HARP eligible homeowners and for the changes to have a meaningful impact. We expect to complete our work by the end of this month,” he added.
However, task force co-chairman Dennis Cardoza, D-Calif., is not satisfied with regulator's effort.
“Mr. DeMarco still refuses to assert his authority and ease restrictions that are preventing middle class homeowners from benefiting from refinancing at today's historically low interest rates,” Rep. Cardoza said.
At a housing conference earlier in the week, the congressman said 70% of the homeowners in his central California district are under water and can't refinance.
Rep. Cummings and other task force members called on President Obama to nominate a new FFHA director to replace DeMarco -- a career bureaucrat. But that is unlikely.
Senate Republicans blocked the President's last attempt to appoint a new GSE regulator. And key Republican lawmakers oppose the Obama administration's efforts to expand the HARP program.