Following a better-than-expected jobs report Friday, emerging news reports suggested that the Obama administration could submit in full a controversial refinance proposal that sources say would allow eligible homeowners to refinance their mortgages at current rates.[IMAGE]
Announced by ""President Barack Obama"":http://www.whitehouse.gov/administration/president-obama/ during his September jobs speech, the refinance proposal would expand the ""Home Affordability Refinance Program"":http://www.makinghomeaffordable.gov/pages/default.aspx (HARP) by lifting caps on loan-to-value ratios that currently require 125 percent in equity from applying homeowners, according to ""_Reuters_"":http://www.reuters.com/article/2011/10/07/us-usa-economy-housing-idUSTRE78K34920111007.
Homeowners who meet the criteria would stand to benefit handsomely from current rates, which ""bottomed out at record lows"":https://themreport.com/articles/mortgage-rates-drop-below-4-for-first-time-2011-10-06 this week.
Government officials remain mum about exactly when officials and policymakers will see the proposal, but continue to offer snippets about their intentions for it.
_Reuters_ quoted ""Treasury Secretary Timothy Geithner"":http://www.treasury.gov/about/Pages/Secretary.aspx as telling a congressional committee Thursday, ""We are very supportive of those reforms. We think that will make a big difference. They are like a tax cut.""
The news service reported the official as adding that the administration remains ""hopeful"" that the ""Federal Housing Finance Agency"":http://www.fhfa.gov/ (FHFA) ""will be able to lay out some clarity to the broader markets and to homeowners in [the] next few weeks.""[COLUMN_BREAK]
If recent events signal anything, troubled political waters await the refinance proposal, not least in the form of the federal agency, which continues to hold ""Fannie Mae"":http://www.fanniemae.com/portal/index.html, ""Freddie Mac"":http://www.freddiemac.com/, and 12 Federal Home Loan Banks in conservatorship.
_Reuters_ reported that 16 Democratic lawmakers met with FHFA ""Acting Director Edward DeMarco"":http://www.fhfa.gov/Default.aspx?Page=67 on Thursday to flush out details for the proposal and help pass it quickly.
Seeming to meet with resistance, ""Rep. Dennis Cardoza"":http://cardoza.house.gov/ (D-California) released a statement afterward criticizing the FHFA chief and calling on Obama to nominate a new director for the agency.
""Mr. DeMarco still refuses to assert his authority and ease the restrictions that are preventing middle class homeowners from benefiting from refinancing at today's historically low interest rates,"" Cardoza said in the statement. ""Millions of people across the country are suffering, and we still don't have a sufficient plan from the FHFA to stem this crisis. Someone in this Administration needs to step up and take decisive action.""
Speaking with _MReport_ for a ""past story"":https://themreport.com/articles/industry-insiders-react-offer-alternatives-to-refi-proposal-2011-09-09, ""Mark Calabria"":http://www.cato.org/people/mark-calabria, director of financial regulation studies at the ""Cato Institute"":http://www.cato.org/, said that DeMarco continued to receive ""a tremendous amount of pressure"" from administration officials eager to launch the refinance program.
""DeMarco's hands are tied in his condition to nurse these companies back to health,"" he said. ""He has a high bar in his mind: Does this proposal help Fannie and Freddie get back to sounder footing? Not at all does he look at his job as a way to make sure that Fannie and Freddie hand out goodies.""
""Robert Lutts"":http://www.ecabot.com/staff_biographies.htm#rob, president and chief investment officer for Salem-based ""Cabot Money Management"":http://www.ecabot.com/, says he favors the refi boom proposal despite action by the Federal Reserve that he faults for setting ""negative precedent"" for fiscal policy.
He says that such programs help ""everyone lower their cost ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô to the cost of savers in America,"" adding, ""really, it's a distribution of wealth by the government to debtors from savers.""