Langevin Introduces Rebuilding Equity Act
Congressman Jim Langevin (D-RI) has re-introduced legislation that is designed to lower refinancing costs, boost the housing market and enable homeowners to refinance their homes at the record low interest rates currently available. The Rebuilding Equity Act creates an incentive for underwater borrowers who are refinancing under the Home Affordable Refinance Program (HARP) to choose a loan term of twenty years or less, in exchange for the Government-Sponsored Enterprise (GSE) paying $1,000 of their closing costs.
“One of my top priorities in Congress is to ensure that every Rhode Islander has access to safe and affordable housing. This is especially important as our state continues its slow recovery from the recent recession, during which we experienced an exceptionally high number of foreclosures,” said Langevin. “This legislation will directly assist struggling homeowners by allowing them to take advantage of low interest rates and build equity in their homes. Even better, the additional savings to homeowners would come at no extra cost to the government.”
The incentives offered in the Rebuilding Equity Act will allow many underwater borrowers to take advantage of the historically low 3.5% interest rate, directing more of each payment to reducing the principal rather than to paying off interest. Most borrowers would begin to build equity in their homes within five years. In exchange for contributing to the borrowers’ closing costs, Fannie Mae and Freddie Mac would significantly reduce the risk of loss to their books, thus saving money for the Enterprises and the taxpayers over time, with no additional cost. The legislation is cosponsored by Congressmen David Cicilline (D-RI), Earl Blumenauer (D-OR) and Rush Holt (D-NJ) and Congresswoman Suzanne Bonamici (D-OR).
“The Rebuilding Equity Act is designed to stabilize the housing market and is an important response to the ongoing housing crisis,” said Congressman Langevin. “I am committed to helping homeowners and the housing market recover, as it is critical to strengthening our economy.”