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St. Louis Refinancing Loan and In-House Financing News: Move Houses, Not Mortgages
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Rep. Randy Neugebauer (R-Texas) said the Obama administration should be focused on helping the private market move through the backlog of foreclosures instead of merely shifting wealth from investors to borrowers in the new refinancing changes.
The Federal Housing Finance Agency (FHFA) announced new changes to the Home Affordable Refinance Program (HARP) designed to make it easier for some 4 million underwater borrowers, who are current on their payments, refinance into a lower-rate loan.
Most Republicans remained silent on the changes so far as they wait for how much the shift will cost Fannie Mae and Freddie Mac, which already owe taxpayers $142 billion in bailouts.
“This is not a housing initiative. This is more of a stimulus plan,” Neugebauer said. “They’re using Fannie and Freddie to stimulate the economy and what we’ve learned is that is not working.”
House Republicans sent a letter to FHFA Acting Director Edward DeMarco last week, asking for the taxpayer cost for HARP 2.0, but his office is still working on that. Fannie and Freddie are working too on the specific guidance for the revamped program, which was due out by November 15, but already many are doubting how effective the stimulus as Neugebauer calls it will be.
Neugebauer said the foreclosure process simply takes too long. According to Lender Processing Services, the mortgages currently entering the foreclosure process have been delinquent an average 611 days.
“We’ve got a lot of inventory in limbo here, and it continues to freeze the market place and compress prices,” Neugebauer said. Outside of new government cuts and calls to repeal certain provisions under the Dodd-Frank Act, ideas to fix the housing market and spur on a recovery have been scarce.
But Rep. Scott Garrett (R-New Jersey) unveiled a plan to ensure a return of private financing for future mortgages without government support. Neugebauer held several talks with Garrett when developing the plan.
While Neugebauer wouldn’t give specifics on the plan just yet, he promised it would provide a concrete plan, something the markets have gone without since the crisis. “I think a lot of the ideas are going to be common sense ideas,” Neugebauer said. “It will give the market some certainty.”
The Obama administration is working on a plan to better liquidate foreclosed properties held by the government through the Department of Housing and Urban Development (HUD), Fannie Mae and Freddie Mac.
Some, the president said Monday, would be converted into rentals. Neugebauer supported that idea so long as the government doesn’t dictate to private investors what should be rented, what should be sold and when.
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In-House Financing, Consumer Lending and Customer Financing
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