- FHFA announced last month that the HARP Program would be extended through 2015, though if the program is not expanded it is hard to envision it helping very many people beyond this year.
- Mortgage Officials met with the White House in April at which time the Obama Administration continued to indicate its support for expanding HARP to private-label loans and extending the HARP eligibility date:
At this point talk is cheap. Underwater homeowners want to see a little less talk and a lot more action, however so far the Obama Administration has not been willing to flex the political muscle needed to make the changes necessary to bring HARP 3.0 to fruition.
- One positive piece of news is the nomination of Mel Watt to replace Ed Demarco as director of the FHFA. If Watt is confirmed it is conceivable he will lift restrictions such as the May 31, 2009 securitization cut off date for HARP eligibility.
- There is no update to pending HARP legislation. The Responsible Homeowner Refinancing Act of 2013, bills H.R. 736 and S. 249, continue to sit idle in chamber committees.
- The Merkley Mortgage, which was first piloted in Oregon’s Multnomah County, has now been expanded to include a limited number of homeowners in Crook, Deschutes, Jackson, Jefferson and Josephine counties. The program has been named the Loan Refinancing Assistance Pilot Project (LRAPP) program with the expectation of helping 300 underwater homeowners to refinance.
- The change.org petition to expand the Merkley Mortgage to other states is still active. Please sign the petition if you have not already done so.
President Obama has finally taken the action to oust Ed Demarco as head of the FHFA. Congressman Mel Watt, D-N.C. has been nominated for FHFA director. The choice is curious to say the least. The Senate must confirm the selections and this is a very partisan selection. Republicans are already criticizing the nomination and they have enough power to block the confirmation. Republicans previously blocked the selection of Joseph Smith who appeared to be a much more qualified candidate. Smith had experience as a Banking Regulator. Mel Watt does not. I want to see Ed Demarco ousted but I’m not real confident that the Mel Watt nomination will standup, and frankly I’m not overly impressed with his credentials to run such an important agency. I would have much preferred Mark Zandi or Ted Tozer who were also to be rumored as candidates for the position.
I keep getting asked if I will start a new petition. Well, here it is.
I can’t put nearly the effort in this one as I did the last. So it is up to all of you to make this happen. Here are the details:
U.S. Treasury and State Housing Agencies that disperse Hardest Hit Funds: Help Underwater Homeowners by Implementing the Merkley Mortgage
Refinancing can save thousands of dollars per month and prevent foreclosures for families underwater on their home loans. Millions of Americans are underwater and are unfortunately not eligible for existing programs such as HARP. The Rebuilding American Homeownership Assistance Pilot Project (aka. The Merkley Mortgage) expands on HARP by allowing people with non-Fannie and Freddie held loans to refinance. It would also allow refinancing for people that have been disqualified due to the arbitrary securitization cut-off date set by the FHFA.
And this is the letter/email that will be delivered:
The President of the United States
The U.S. Senate
Sen. Jeff Merkley, OR
Florida Housing Finance Corporation
Indiana Housing & Community Development Authority
alabama housing finance authority
Arizona Department of Housing
California Housing Finance Agency
Georgia Housing and Finance Authority
Illinois Housing Development Authority
Kentucky Housing Corporation
Michigan State Housing Development Authority
Mississippi Home Corporation
Nevada Affordable Housing Assistance Corporation
New Jersey Housing and Mortgage Finance Agency
North Carolina Housing Finance Agency
Ohio Housing Finance Agency
Oregon Department of Housing and Community Services
South Carolina State Housing and Development Authority
Tennessee Housing Development Agency
District of Columbia Housing Finance Agency
Millions of underwater homeowners stand to benefit by refinancing. Unfortunately, many are not eligible for the current programs such as HARP. Senator Merkley of Oregon has advanced the Rebuilding American Homeownership (RAH) plan using the U.S. Treasury TARP “Hardest Hit Funds” to serve as a more inclusive underwater refinance plan. The Merkley plan would equally benefit those with GSE backed loans and non-Fannie and non-Freddie backed loans . The plan is currently being piloted in Oregon’s Multnomah County. The RAH Pilot Program could serve as the template for assisting underwater homeowners in need of refinancing in your state. Please implement RAH using your allocated “Hardest Hit Funds”.
It has been rumored for some time that President Obama would like to replace interim FHFA Director Ed Demarco. Demarco has drawn the ire of the White House and Housing Advocacy Groups for his unwillingness to implement policies that would aid underwater homeowners. As director of the FHFA Demarco has almost sole authority over Fannie Mae and Freddie Mac. For one reason or another Demarco has managed to retain his post for more than 3 years despite clear opposition to his policies from the White House Administration and the U.S. Treasury. There is mounting pressure for the President to appoint a new permanent FHFA director. Last month 45 Democratic Congressmen signed a letter urging the President to replace Demarco. Yesterday Attorney Generals from 9 different states also signed a letter requesting the President to fire Ed Demarco. One of the major reasons Demarco has retained his position is that he is well regarded by Republicans. Under Demarco’s watch the balance sheets of Fannie Mae and Freddie Mac have been stabilized. There is no question that Demarco has improved the bottom line of Fannie and Freddie with his risk averse policies. However, that has come at a great opportunity cost. Millions of American homeowners remain underwater and countless numbers of foreclosures could have been prevented if Demarco had been willing to allow targeted principal reductions and less restrictive limitations on HARP refinances. Replacing Demarco will require Senate confirmation of a new appointee which will prove difficult to attain given Republican opposition. However a path of least opposition exists; make a recess appointment of a new FHFA director during the Congressional Easter Recess. Congress will be on recess from March 25 thru April 5. No confirmation would be needed during a recess appointment. There is pending litigation concerning the constitutionality of recess appointments, however it will take time for those rulings and appeals to fully play out. In the mean time Demarco would be gone and a new FHFA director that is willing to implement policies that actually help underwater homeowners would be in place. Here’s hoping that President Obama doesn’t miss on this Easter opportunity to fire Ed Demarco.
In the two plus months since this website was launched there have been numerous complaints left in the comments section concerning HSBC. It is quite evident that HSBC is completely unwilling to work with the underwater homeowners they service. However, I have found a way to get HSBC to help you. Conduct any sort of illegal activity whether it be running a drug cartel or terrorist organization, and HSBC will be more than happy to help launder money from your illegal activities. Yes, it is true, HSBC has helped Mexican drug cartels and al-Qaida, but they won’t help underwater homeowners to afford their bloated payments.
Four and a half years ago in response to the mortgage crisis the government seized control of Freddie Mac and Fannie Mae. The Federal Housing Finance Agency (FHFA) was created as a regulatory agency and the two government sponsored mortgage giants were placed into conservatorship of the FHFA while the murky waters of the financial crisis of 2008 were navigated. More than 4 years later, little has changed. The aftermath of the financial crisis is still being dealt with and there has been no sign of legislation to reform Fannie and Freddie, or the role of government in the securitization of mortgages on the secondary mortgage markets. Not only has the President or Congress not put forth a plan for Housing Reform, but they have yet to replace Ed Demarco as the acting director of the FHFA. For more than 3 years the FHFA has been led by a man that wasn’t even appointed to the position. During his tenure Demarco has thrown up all sorts of brick walls that have slowed the housing recovery. From not allowing loan modifications unless borrowers were on the verge of foreclosure to strict limits on securtization cutoff dates for the HARP program, Demarco has been thwarting all efforts to aid underwater homeowners since he assumed the position of acting director in 2009. Now Demarco is taking on GSE reform. This week the FHFA unveiled plans to build a single-securitization platform that would include a new business entity that would function in between Fannie and Freddie. It is one thing to allow Ed Demarco to wreck short term policies such as HARP and HAMP, but now he is getting his fingerprints all over the future of mortgage securitization. Perhaps the plan being put forth by Ed Demarco and the FHFA is a good one. Frankly, that is beside the point. Reform of this magnitude shouldn’t be coming from a temporary leader of a government agency. The President and Congress have shown a complete lack of courage in dealing with this problem. And allowing Ed Demarco to be the “problem solver” for Housing Reform is just ludicrous. It just proves how spineless and negligent our current policy makers are.
I have received a lot of questions about when the Rebuilding American Homeownership that is being piloted in Oregon’s Multnomah County will be available to people in other areas of the country. As a refresher The Rebuilding American Homeownership Pilot Program (RAHPP) is a plan proposed by Oregon Senator Jeff Merkley that would allow underwater homeowners additional refinance opportunities even if their mortgage is not owned by Fannie Mae or Freddie Mac. The program is being piloted in Multnomah County which is in the Portland, Oregon area. It is being funded from U.S. Treasury “Hardest Hit” Funds that were awarded to Oregon. Many people have hopes that RAHPP can evolve into HARP 3.0 and become available nationwide. I hate to throw cold water on the hopes of the many people that really need this program to be available to them, but I think it is very unlikely that RAHPP gets a green light nation wide. The funds just aren’t available to support it nationally, and I’m highly skeptical that Congress would be able to pass legislation to fund the program for nationwide launch. I think a more likely scenario is certain states will follow Oregon’s lead and tap into existing funds such as the U.S. Treasury “Hardest Hit” fund (or potentially other federal funds that have been earmarked for economic stimulus) to deploy their own refinance programs. If the pilot program in Multnomah County works out well it is likely other states will use it to model the refinance programs they launch. The question becomes how grand can the scope of Merkley Mortgage be if it is rolled out by states using U.S. Treasury Funds? Only 18 states were awarded “Hardest Hit” Funds and it is likely that states would want to target specifically hard hit real estate markets if and when they launch programs similar to RAHPP. The bottom line is I think RHAPP will expand later this year to select areas in select states but I don’t believe it will even become available nationwide. If you live in a state that received “Hardest Hit” funds you probably have a better chance seeing some version of this program than states that did not receive funds from the Treasury. Here is a list of states that were awarded U.S Treasury funds: Alabama, Arizona, California, Florida, Georgia, Illinois, Indiana, Kentucky, Michigan, Mississippi, Nevada, New Jersey, North Carolina, Ohio, Oregon, Rhode Island, South Carolina, Tennessee, Washington DC.
Last week the U.S. Treasury Department approved a pilot program in Oregon’s Multnomah County that would allow underwater homeowners additional refinance opportunities even if their mortgage is not owned by Fannie Mae and Freddie Mac. The program draws heavily from Senator Jeff Merkley’s Rebuilding American Homeownership proposal made last year. The pilot is officially known as the Rebuilding American Homeownership Pilot Program (RAHPP). RAHPP, which uses funds from the U.S. Treasury “Hardest Hit” Fund, could serve as a national model for expanding HARP to homeowners with non-GSE held home loans. The plan works like as this. Any underwater homeowner that is current on their mortgage and have no other residential property can choose between two refinancing options:
- A 30-year fixed-rate loan at 5 percent
- A 15-year fixed-rate loan at 4 percent
All loan types qualify, the current mortgage does not have to have been originated before May 31, 2009, and the current mortgage need not be secured by Fannie Mae or Freddie Mac. The only other requirement is the homeowner must plan on staying in their home for at least five more years. There have been no details yet released on how long the pilot program will run, what the success criteria for RAHPP is, or when it may be expanded beyond Multnomah County, however other states are said to be considering using the U.S. Treasury “Hardest Hit” Fund to finance similar initiatives. At the very least it appears that individual states will have the U.S. Treasury’s blessing to move forward with their own refinance plans for underwater homeowners.
Tonight President Obama will deliver the 2013 State of the Union Address. The economy is expected to once again be a main focus of this year’s address, however it is unclear if housing policy will be a prominent topic like last year. During the 2012 State of the Union Address President Obama pushed for a broad home refinance initiative aimed at aiding underwater homeowners. That laid the groundwork for the #myrefi HARP 3.0 initiative. Due to partisanship politics in Congress and amongst policy makers at the FHFA HARP 3.0 has yet to become a reality. The President may or may not emphasize housing policy during the 2013 State of the Union Address, however the 12 million underwater homeowners in the U.S. can still use this opportunity to raise the priority on this issue via social media. Tracy Van Slyke of the New Bottom Line has been organizing a movement that calls for President Obama to fire FHFA director Ed DeMarco within the first 100 days of his second term as president. Tracy is using the opportunity to make hashtag #DumpDeMarco trend on twitter during the State of the Union Address. You can join this effort by tweeting the following message at the start of the address:
Who is the roadblock to economic progress? Meet the Bush appointee that works for Obama. http://dumpdemarconow.com #DUMPDeMarco #SOTU
To make the effort even easier Tracy has set up a Thunderclap project to time the tweets to occur at the exact same moment for maximum effect. Simply register for the #DumpDemarco Thunderclap and your voice can be heard during the State of the Union Address. Here is the link to join the effort:
Senators Robert Menendez and Barbara Boxer have introduced a new bill to the 113th Congress aimed at expanding the Home Affordable Refinance Program by removing barriers that prevent existing Fannie Mae and Freddie Mac borrowers from taking advantage of the HARP program. The bill is very similar to a proposal they sponsored last summer. The bill, S. 249 – The Responsible Homeowner Refinancing Act of 2013, would do the following:
- Ensure that streamlined refinancing is available and consistent for all Fannie and Freddie borrowers, regardless of whether they are underwater or not
- Reduce up-front fees on refinances
- Eliminate appraisal costs for all borrowers
- Remove additional barriers to competition
- Extend HARP by one year, to allow eligible borrowers more time to access the program
The bill has extensive support from housing advocacy groups and economists. 21 Senators have also added their names as cosponsors of the bill. However, at this time the support is strictly partisan. No Republican has yet to cosponsor or endorse the bill. S. 249 has been referred to the Senate Committee on Banking, Housing, and Urban Affairs. The best way to show support for this bill would be to write or call the offices of the GOP members of the Committee on Banking, Housing, and Urban Affairs and urge them to support S. 249 – The Responsible Homeowner Refinancing Act of 2013. Here is the list of Republicans that sit on the committee: