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Senators urge dropping barriers to refinance

Both of California’s U.S. Senators are among more than a dozen from both sides of the aisle who urged the Obama Administration today to make administrative reforms to help millions of responsible homeowners refinance and take advantage of today’s record-low interest rates.

The lawmakers – writing to Housing and Urban Development Secretary Shaun Donovan, Treasury Secretary Timothy Geithner, National Economic Council Director Gene Sperling and Federal Housing Finance Agency Acting Director Edward DeMarco – said that with interest rates at 3.94 percent, it’s time to lower barriers that keep borrowers trapped in higher-interest loans and to address other hurdles that limit existing refinancing programs.

Specifically, they called for removing loan-to-value limits, which they said would provide the most at-risk borrowers an alternative to simply walking away from their mortgage; eliminating loan level price adjustments, which they say make a refinance less affordable, reduce the benefit to the borrower, and can’t be justified on loans on which Fannie Mae and Freddie Mac already bear the risk; and ensuring that second lien holders don’t stand in the way of a refinance.

“Time is of the essence and we urge you to act quickly and aggressively to ensure that responsible homeowners receive the full benefit of these lower rates,” they wrote.

In addition to U.S. Senators Barbara Boxer, D-Calif., and Dianne Feinstein, D-Calif., the letter was signed by Johnny Isakson, R-Ga.; Robert Menendez, D-N.J.; Mark Begich, D-Alaska; Jeff Merkley, D-Ore.; Sheldon Whitehouse, D-R.I; Debbie Stabenow, D-Mich.; Scott Brown, R-Mass.; Robert Casey Jr., D-Pa.; Richard Burr, R-N.C.; Frank Lautenberg, D-N.J.; John Kerry, D-Mass.; Mark Warner, D-Va.; Saxby Chambliss, R-Ga.; and Ron Wyden, D-Ore.

Read the full text of the letter, after the jump…
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Dissecting the debt-ceiling/deficit deal

The debt-ceiling and deficit reduction package on which Congress will vote later today “removed the cloud of uncertainty that was over our economy” and paves the way for further, balanced debttt reduction later on, a top White House aide said a few minutes ago.

On a conference call with reporters, David Plouffe – senior advisor and assistant to President Barack Obama – said the bipartisan “supercommittee” this package creates will have until Thanksgiving to come up with a plan that will mix spending cuts with tax reform, possibly including closing corporate tax loopholes and raising taxes on the nation’s wealthiest.

Asked why anyone should believe this panel will succeed in accomplishing what so many others have failed to do – devising a plan that can get enough votes in Congress plus the President’s signature – Plouffe replied that this commission isn’t starting from square one. Its work will be based in part on frameworks already established by the National Commission on Fiscal Responsibility and Reform and in the more recent, direct talks between the President and House Speaker John Boehner.

National Economic Council Director Gene Sperling noted that when the Senate’s “Gang of Six” recently advanced a plan with even more revenue than the President had sought, as many as 15 to 20 Republican senators appeared ready to sign on. Poll show the public wants a balanced approach and experts say it’s the only way to go, Sperling said, so Republicans in both chambers will have to realize they can’t put an undue burden of deficit reduction on the nation’s most vulnerable if they want to see it become law.

But voices at both sides of the political spectrum are crying foul. Lots more on that, after the jump…
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