The Responsible Homeowner Refinancing Act, a recently proposed bill in the House of Representatives, would help millions of homeowners refinance at lower interest rates, thus saving thousands of dollars a year and rewarding those who have been responsible in keeping up with mortgage payments.
HARP, he current refinancing program, only saves homeowners on the average about $2500 a year, but the new bill would increase the savings and the opportunity to refinance for millions of borrowers who met the eligibility requirements. The new bill also will supposedly help many who do not qualify under HARP.
Here is what else the new bill will do:
• Allow for streamlined refinancing options for Fannie Mae and Freddie Mac borrowers, whether or not they are currently underwater. Under the HARP program many underwater borrowers were cut out because of a lack of equity; the new legislation will require all servicers to adhere to the same set of rules, thus providing more underwater borrowers the opportunity to refinance.
• Eliminate appraisal costs for every borrower under the program
• Reduce refinance fees that are paid up-front
• Remove other barriers to competition, so that other lenders could compete for your business
• Streamline the application process so it is quicker
• Extend HARP for one year, so that eligible borrowers could access the program
I am happy that this new bill may help some borrowers be able to refinance into lower rate loans, however, the new bill will still only apply to borrowers whose loans are Fannie or Freddie loans. There is still a very large pool of homeowners out there who would love to refinance but do not have Fannie or Freddie loans. There has been talk of legislation that would help these other borrowers, but so far we have not seen it materialize. My hope is that this will be the next big focus of our legislators.
To track the progress of this bill you can visit this site.