More Opportunities for Refinancing?

By: Denise Wong Email
By: Denise Wong Email

RENO, NV - Several bills working their way through Congress would create more opportunities for homeowners to refinance. At a time when Nevada is ranked third highest in the nation for foreclosures and 30-year-mortgage rates are at a historic low, people here are paying attention. So is the U.S. Secretary of Housing and Urban Development - who made a special stop in Reno this week.

"Nevada has the highest share of underwater homeowners in the country," said Shaun Donovan, the U.S. Secretary of Housing and Urban Development. Secretary Donovan made the remark during his visit to Reno on Monday. It was at the Nevada Association of Realtors Office, where he spearheaded a roundtable discussion on refinancing.

"We have people in the room who are currently refinancing their home. We have realtors in the room, bankers in the room, mediators for foreclosed homes," said Kate Marshall, Nevada State Treasurer after the roundtable. "They had a chance to explain to the secretary, here's how it works on the ground."

During Monday's media event, Secretary Donovan also discussed four Senate bills that could provide relief to homeowners who are trying to refinance, but have not been able to. One is the Responsible Homeowner Refinancing Act, also known as Senate Bill 3085. If passed, it would open up refinancing to homeowners who do not have a government-insured mortgage.

"Right now, the changes that we've made have helped those with Freddie Mac and Fannie Mae to refinance. But other families who don't have a government insured mortgage are locked out of refinancing if they're underwater today," said Secretary Donovan.

The second bill is the Expanding Refinancing Opportunities Act, also known as Senate Bill 3047. It would remove some of the final barriers that are preventing some Freddie Mac and Fannie Mae borrowers from refinancing.

The third proposal is the Project Rebuild Act. This would promote renovating and rebuilding vacant homes.

"In Nevada alone, it would put more than 10,000 construction workers and other real estate professionals back to work, renovating and rebuilding those homes. And it would help rebuild the equity of those homes that were renovated, the neighbors of those homes," said Secretary Donovan.

Finally, the fourth proposal is the Rebuilding Equity Act, also known as Senate Bill 2909. This would help cover the closing costs for underwater borrowers who choose to rebuild their home equity through a shorter term loan.

"The average family that saves like a family refinancing today about $3,000 a year. What do they do with that money? They put it back into the economy. It has ripple effects that create jobs and helps not only that family, but a state like Nevada as well," said Secretary Donovan.

These four proposals together represent President Obama's Universal Refinancing Plan. Secretary Donovan said, in the past, these proposals have a history of bi-partisan support. He said he would take what he heard in Nevada from homeowners and real estate professionals and bring that information back to Washington.

"We are not done," said Secretary Donovan. "there are still families who are frustrated."

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