Budget office discourages mortgage refinancing plan

TRD NEW YORK /
Sep.September 08, 2011 09:41 AM

The Congressional Budget office has thrown cold water on a U.S. initiative to refinance loans held by millions of homeowners, and stated its support for Edward DeMarco, the Federal Housing Finance Agency acting chief, who has drawn criticism for his skepticism of the plan, the Financial Times reported.

The initiative would effectively leave private investors with double in losses what borrowers would get in payment relief, researchers at the CBO found in a recent study.

“The study recognizes the enormous losses private investors would suffer in a transfer of wealth to borrowers,” said Joshua Rosner, a housing finance expert and managing director at independent research firm Graham Fisher & Co. “While such a transfer would be acceptable to some in Washington … it would result in the unwillingness of investors to buy mortgage-backed securities without charging an exorbitant risk premium to compensate for the event the government does this regularly.”

The White House been considering launching a mass-refinancing scheme after previous housing efforts fell flat, the Times said. President Barack Obama is expected to address the topic this evening in a speech to Congress. [Financial Times]


Related Articles

arrow_forward_ios
The Obamas and 79 Turkeyland Cove Road (Credit: Getty Images, Zillow)

Post-presidential pads: After the White House, what comes next?

The Eugene at 435 West 31st Street and Brookfield's Ric Clark (Credit: StreetEasy and Brookfield)

Brookfield scores $479M refi on Manhattan West resi tower

180 Maiden Lane with Clarion Partners CEO David Gilbert (red) and MHP Real Estate Services CEO David Sturner (blue) (Credit: Google Maps, Clarion, MHP)

Clarion Partners group lands $372M refi on FiDI tower

New York Life building gets $410M refi

New York Life building gets $410M refi

461 West 34th Street with Marx Development Group's David Marx (Credit: Google Maps)

David Marx lands $202M refi for Hudson Yards hotel

70 Pine Street and Goldman Sachs chairman Lloyd Blankfein (Credit: Wikipedia and Getty Images)

Goldman Sachs refis Art Deco apartment conversion at 70 Pine with $386M loan

329 Broadway and JLJ CEO Jonathan Lewis (Credit: Syndicate Architecture via CityRealty, Google Maps)

Williamsburg developer lands $57M refi to complete 329 Broadway

M&T CEO René Jones and Brookfield managing partner Ben Brown with 5 Manhattan West (Credit: M&T, Brookfield, and Wikipedia)

Brookfield lands $184M refinancing for Manhattan West retail

arrow_forward_ios
Loading...