Key senators signaled guarded optimism Thursday about the chances of finding a bipartisan compromise on mortgage refinancing legislation, though the bill still faces an uphill fight in the House.
At a Senate Banking Committee hearing, GOP Sen. Bob Corker outlined four changes he is seeking to a bill sponsored by Democratic Sen. Robert Menendez.
Minutes later, Corker sounded a positive note about a conversation that he and Menendez had Thursday about the proposed changes. "I think there is a desire to look at some of the things that we've brought forth," Corker told ASR sister publication American Banker, "so we'll just have to see."
Menendez, also speaking after the hearing, said: "We're certainly open to consider reasonable requests as long as we get to the ultimate goal. Time is of the essence if we're going to actually get 3 million or more homeowners the opportunity to refinance."
Corker's stamp of approval would allow the bill to pass the Banking Committee with bipartisan support. That would help the measure garner the 60 votes — including the votes of at least seven Republicans — that are routinely necessary to pass legislation in the Senate.
During Thursday's hearing, Corker laid out his requested changes in a series of questions to witnesses who were testifying about the bill. The legislation, which is being co-sponsored by Democratic Sen. Barbara Boxer, would make refinancing easier for millions of homeowners with Fannie Mae and Freddie Mac mortgages.
Corker, R-Tenn., suggested that he wants a change to prevent homeowners from refinancing under its terms more than once. He would also like to retain the ability of Fannie and Freddie to put back refinanced mortgages to their originators.
In addition, Corker would change the bill's provisions on data collection. And lastly, while the bill currently states that homeowners must have a mortgage originated prior to June 2010 in order to qualify, Corker would push that date back to June 2009.
Democrats on the Banking Committee have not ruled out the possibility of bypassing a committee vote and taking the Menendez-Boxer bill directly to a vote on the Senate floor. Republicans, on the other hand, have been pushing for a committee vote.
"I think the Senate hasn't been functioning properly because we've been airdropping things in," Corker said during the hearing, "and yet I notice when we pass things out of committee in a bipartisan way they actually seem to happen. "
Menendez, D-N.J., estimated that his bill will help roughly 3 million homeowners who are current on their mortgages by expanding access to the Obama administration's flagship refinancing program. That program — the Home Affordable Refinancing Program, or Harp — was already expanded once after its initial terms yielded disappointing results.
The Menendez-Boxer legislation aims to increase competition between lenders by removing some of the requirements that apply to new originators, but do not apply to existing ones. It would also allow homeowners who have more than 20% equity in their homes to qualify for the program, now known as Harp 2.0.
"Any homeowner with a Fannie or Freddie loan should be able to get a pre-approved package in the mail from the lender, sign on the bottom line and be automatically put into a refinance loan that saves them hundreds of dollars a month," Menendez said at Thursday's hearing.
"No more lending bureaucracy, no more red tape. It should be simple for any homeowner to do this."
Testifying on behalf of the bill Thursday were Moe Veissi, president of the National Association of Realtors, and Bill Emerson, the chief executive officer of Quicken Loans.