Shaun Donovan, secretary of the U.S. Department of Housing and Urban Development, is pushing for mortgage refinancing reform and supporting a proposed bill to eliminate certain refinancing barriers, according to DS News. The Federal Housing Administration convened with the Senate Banking Committee yesterday where Donovan made his case that lower fees, simpler underwriting guidelines and manual appraisals for borrowers would increase refinance opportunities for homeowners.
“Frankly, we think it doesn’t make a lot of common sense that a homeowner who actually has more equity in their home is a lower-risk borrower… [than] homeowners who may be underwater on their homes,” Donovan said. “It’s a question of fairness to make sure refinancing is available across the board.”
The refinancing reform bill, introduced by Senators Barbara Boxer and Robert Menendez, has met political opposition. Senator Richard Shelby voiced skepticism over the position, asking Donovan, “Do you share my overall concern about the solvency of FHA?” Donovan responded that the FHA is taking “a number of broad steps to protect the fund.” [DS News]