The Helping Responsible Homeowners Act of 2011 has been introduced. It would remove barriers that are preventing non-delinquent borrowers from refinancing their mortgages and taking advantage of historically low interest rates. The legislation aims to help borrowers who continue to make their mortgage payments on time, but whose homes have lost value during the real estate crisis.

"At a time when millions of Americans have been forced out of their homes, this legislation will ensure that homeowners who make their payments on time will be able to refinance their mortgages at current low rates so they can stay in their homes," said Sen. Boxer. "Another benefit will be more disposable income at a time when our economic recovery needs a boost in consumer spending."

Currently, Fannie Mae and Freddie Mac offer refinancing programs to these homeowners. However, participation has been low, in part because homeowners must pay high, risk-based fees upfront to refinance their loans--even though Fannie and Freddie already bear the risk if these homeowners were to default on their loans. These additional fees can be as high as two percent of the loan amount, or an extra $4,000 on a $200,000 loan.

These fees can discourage borrowers from refinancing in a time of historically low interest rates, making it more likely that they will eventually default rather than pay high rates.

Sen. Boxer's legislation would:

?Eliminate risk-based fees on loans for which Fannie and Freddie already bear the risk;

?Remove refinancing limits on underwater properties;

?Make it easier for borrowers with second mortgages to participate in refinancing programs;

?Require that borrowers are able to receive a fair interest rate, comparable to that received by any other borrower in good standing who has not suffered a drop in home value and has stayed current with their mortgage payments.

Despite a recent uptick, interest rates for 30-year home mortgages remain near historically low levels--under five percent. Yet nearly 13 million of the 31.5 million mortgages guaranteed by Fannie Mae and Freddie Mac still carry an interest rate above six percent. This bill would allow non-delinquent mortgages to be refinanced at current rates, putting thousands of dollars a year back in the pockets of struggling families.

Patrick McCarthy
Northpointe Mortgage
866-901-3576