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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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Miller leads complaint about foreclosure aid

Rep. George Miller, the House Education and the Workforce Committee’s ranking Democrat, led 18 House Democrats in complaining to the Obama Administration yesterday that not enough has been done to help distressed homeowners in the Bay Area and nationwide.

“We are writing to urge stronger and immediate actions by the Administration to help many of our constituents who are being routinely abused, lied to, and subjected to financial conflicts of interest by lenders and mortgage servicers, including those participating in federal programs,” they said in their letter to Vice President Joe Biden.

“Our constituents are running out of time. This Administration must stand up for America’s families caught in the housing crisis. The Making Home Affordable Program is simply not making sufficient progress to prevent unnecessary foreclosures. It has so far failed to ensure that mortgage servicers work with homeowners in good faith to achieve loss mitigation that works for homeowners, investors and our communities.”

With the $29 billion Home Affordable Modification Program having been pegged by the Government Accountability Office and other independent watchdogs as inefficient and in need of reform, House Republicans are targeting HAMP for elimination as part of their proposed budget cuts. Miller, D-Martinez, and his cohorts don’t support that, but rather are urging the program’s immediate improvement to crack down on mortgage servicers’ abusive practices.

Miller organized a meeting last week for more than a dozen of his colleagues with Treasury Secretary Tim Geithner and Housing Secretary Shaun Donovan to convey their concern over HAMP and their constituents’ mistreatment. Among the signatories of yesterday’s letter were representatives John Garamendi, D-Walnut Grove; Jerry McNerney, D-Pleasanton; Jackie Speier, D-Hillsborough; Anna Eshoo, D-Palo Alto; and Zoe Lofgren, D-San Jose.

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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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East Bay clergy at D.C. prayer service for homes

Minister Marvin Webb of Richmond’s Bethlehem Missionary Baptist Church and the Rev. Lucy Kolin of Oakland’s Resurrection Lutheran Church took center stage Tuesday at a PICO National Network-organized prayer rally outside the U.S. Treasury in Washington, D.C.. About 40 clergy members and 100 congregants asked God to help keep Americans from losing their homes, and prayed that Congress and Treasury Secretary Henry Paulson would provide help to all those facing foreclosure.

Paulson wasn’t there, however; he was at the Capitol, briefing Congress on how he doesn’t think it prudent to use some of the $700 billion lawmakers made available to him to deal with toxic mortgage assets, as he’d originally said he intended to do.

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So, who’s getting bailed out, now?

Remember all that money the American taxpayer had to pony up post-haste, without question, for a bailout lest the entire economy collapse in flames? Well, um, we’re gonna do something different with it now.

The Treasury Department on Wednesday officially abandoned the original strategy behind its $700 billion effort to rescue the financial system, as administration officials acknowledged that banks and financial institutions were as unwilling as ever to lend to consumers.

But with a little more than two months left before President Bush leaves office, Treasury Secretary Henry M. Paulson Jr. is hoping to put in place a major new lending program that would be run by the Federal Reserve and aimed at unlocking the frozen consumer credit market.

The program, still in the planning stages, would for the first time use bailout funds specifically to help consumers instead of banks, savings and loans and Wall Street firms.

OK, so supposedly it’ll now go to help “the little guy.” I, for one, would feel better if anybody was really watching

In the six weeks since lawmakers approved the Treasury’s massive bailout of financial firms, the government has poured money into the country’s largest banks, recruited smaller banks into the program and repeatedly widened its scope to cover yet other types of businesses, from insurers to consumer lenders.

Along the way, the Bush administration has committed $290 billion of the $700 billion rescue package.

Yet for all this activity, no formal action has been taken to fill the independent oversight posts established by Congress when it approved the bailout to prevent corruption and government waste. Nor has the first monitoring report required by lawmakers been completed, though the initial deadline has passed.

Sounds like a perfect recipe for that old expression, “robbed blind.”