The mortgage refinance bill that could give relief to millions of homeowners each year, according to supporters, has been set before a strongly divided Congress, The Associated Press reported.
Homeowners may not get to see a speedy passage of the refinancing bill, even after the push in President Barack Obama's State of the Union Address a few weeks back. The proposal is expected to help homeowners with Fannie Mae and Freddie Mac mortgages and the opportunity to refinance at today's low interest rates.
The president asked Congress to take heed to the families struggling to refinance even those who have made steady payments are being denied the chance to refinance with mortgage rates at a 50-year low.
While it has a strong chance of passing in the Democratic-majority Senate, the bill could be stalled or not even passed in the Republican-controlled House. The housing market has a direct effect on the economy, if homeowners see a recovery it adds a strong boost to the financial system. However, Republicans stance on government taking smaller roles in the housing market would likely be the roadblock, according to The Associated Press.
"The American taxpayers have already sunk $190 billion dollars into the operations of Fannie and Freddie," said Rep. Randy Neugebauer, Texas Republican, a member of the House Financial Services Committee in an interview with The AP. "It's time that we wind their operations down instead of using them as a piggy bank for failed programs that further delay the housing recovery."
Fannie Mae and Freddie Mac provide loans for approximately 12 million homeowners and Senators Bob Menedez and Barbara Boxer of New Jersey and California, respectively, said many people can't refinance because of high fees as a result of reduced competition among banks, the AP reported.
The Home Affordable Refinancing Program expects to save homeowners an average of $2,500 per year through up-front fees reduction and removal of appraisal costs for borrowers.
