[CLBS] Principal Paydown Plan

[Alan Cameron]

I don't know if there has been a direct response but my sense is that the principal reduction proposal is going nowhere.  The Federal Housing Finance Agency (FHFA), the conservator for Fannie Mae and Freddie Mac, issued a white paper late last year setting out a variety of reasons why principal reduction is a bad idea as a general concept (although acknowledging there may be some situations where it makes sense) and that would seem to be the position of the Administration.  President Obama has announced a variety of initiatives including a proposal that for GSE-backed loans (over 80%0f all mortgages), the Administration is calling on Congress to do the following:
.	Eliminate appraisal costs for all borrowers on refinancing (using instead the GSEs' Automated Valuation Model (AVM), mark-to-market accounting or other methods);
.	Require the same streamlined underwriting for new servicers as the GSEs require for current servicers to level the playing field and encourage competition between servicers for borrowers' business (FHFA is in the process of building an entirely new securitization platform);
.	Extend streamlined refinancing for all GSE borrowers to enable low-cost access to today's interest rates.

Senators Robert Menendez (D-NJ) and Barbara Boxer (D-CA) have introduced S. 3085 to accomplish this and more.  The bill now has 12 cosponsors but they are all Democrats and the bill is going nowhere until they get some Republican support.  I do hear that there is some momentum building behind the bill though so it makes sense to write your Senator if you think this is a good idea.  You can read the bill online at http://thomas.loc.gov/cgi-bin/query/z?c112:S.3085:



Alan D. Cameron
President/CEO
Idaho Credit Union League
2770 Vista Avenue
P.O. Box 5158
Boise, ID 83705-0158
800-627-1820
208-343-4841
Fax: 208-343-4869
acameron at idahocul.org
Online at http://www.idahocul.org


 
 

-----Original Message-----
From: clbs-bounces at admws.idaho.gov [mailto:clbs-bounces at admws.idaho.gov] On Behalf Of Denton Andrews
Sent: Thursday, June 14, 2012 1:44 PM
To: Clbs at Admws. Idaho. Gov
Cc: 'Audrey'
Subject: [CLBS] Principal Paydown Plan

Does anyone know if the present Administration has responded to this proposal of NACBA?
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