WASHINGTON (Reuters) – Democratic Senators introduced on Monday another bill to help struggling homeowners refinance their mortgages, trying for the second time to carry out an Obama administration’s plan to revive the housing market.
In an attempt to win Republican and industry support, the senators retooled their original bill to make refinancing easier for homeowners who are current on their payments and have loans owned or guaranteed by Fannie Mae and Freddie Mac.
Their latest bill now has the support of a wide range of influential consumer and housing groups, including the Consumer Federation of America, the National Association of Realtors, the National Association of Home Builders and the Mortgage Bankers Association.
“We have addressed every objection we have heard to the prior version of the bill,” Democratic Senator Robert Menendez of New Jersey told reporters.
Menendez and fellow Democratic Senator Barbara Boxer of California dropped provisions such as penalties for second lien holders and an extension of the date under which mortgages would be eligible for the program.
But it was not clear whether the Democrats have the votes needed to pass the bill in the Senate or whether the lawmakers in the House of Representatives would craft and pass similar legislation — requirements needed for a bill to become law.
Democratic President Barack Obama, who has two months to convince voters that his policies have boosted the economy ahead of November 6 elections, has unveiled plan after plan to spur the housing market and prevent foreclosures.
But although U.S. home prices have strengthened, millions of homeowners are still underwater because they owe more than their houses are currently worth.
The bill would build on an Obama administration program known as the Home Affordable Refinance Program that allows homeowners to refinance if they are underwater but are current on their payments.
“We do need to act now because we have historic low rates. We are talking about a lot of money in the pockets of people,” Boxer told reporters.
The bill would remove barriers to the program. If it became law, Fannie Mae and Freddie Mac would be prohibited from charging up-front fees to refinance loans they already guarantee and appraisal costs for all borrowers would be eliminated.
According to the bill, nearly 13.5 million borrowers with loans guaranteed by Fannie Mae and Freddie Mac could benefit from refinancing.