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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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Throwing down on the AIG bonuses

Here’s what U.S. Sen. Barbara Boxer, D-Calif., had to say on the Senate floor today about the $165 million in bonuses being paid out to executive and top employees at AIG, the insurance giant which recently received about $170 billion in taxpayer funds as a bailout to prevent bankruptcy:

This Associated Press article does a good job of putting the bonuses in context, at least to some extent. People are angry that AIG employees seem to be richly rewarded for catastrophic failure that has put the world economy at risk, and that’s entirely understandable, but the truth is: this bonus incentive system is how Wall Street works, and perhaps the politicians’ ire would’ve been more helpful before all the papers were signed and our money handed over, back when it would’ve been easier to re-open the AIG workers’ contracts and deal with this issue.

Anyway, some more of your voices in Congress speak out about the AIG bonuses, after the jump…
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