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Merkley Meets with Portland Area Homeowners to Unveil His Plan to Jump-Start Housing MarketsSalem-News.com
Senator Proposes 4% Refinancing Option for all Underwater Homeowners to Spur Economy.
(PORTLAND, OR) - Oregon’s Senator Jeff Merkley today visited a Portland home that is underwater and talked with two area homeowners whose houses are underwater and have been unable to refinance their homes. Merkley was there to explain his new plan to jump-start the housing market. In a white paper released earlier this week called “The 4% Mortgage: Rebuilding American Homeownership,” Merkley laid out a plan to enable underwater homeowners who are current on their mortgages to refinance to a lower interest rate.
Merkley announced the plan on YouTube, Twitter and Facebook earlier this week
“Across Oregon, about 80,000 homeowners are current on their loans but trapped in high interest rates because their homes are underwater,” said Merkley. “Enabling these homeowners to refinance at lower rates has multiple benefits: families regain a strong financial foundation; communities benefit from fewer foreclosures; and the broader economy benefits from an improved new home market and greater family purchasing power.”
Merkley's plan, which would raise the funds for mortgages from private investors, would not cost taxpayers any money. In fact, it’s projected to turn a profit for the national Treasury.
The Senator was joined at today’s event by two homeowners who have been struggling to pay their monthly mortgage payment and were unable to refinance because their homes were underwater. Both have tried to get a modified mortgage but have struggled through modification process due to banks losing their paperwork and inconsistent contact from the banks.
“Attempting to get a modification on my mortgage has been so frustrating and if there had been a program like this two years ago I might not be worried today about potential foreclosure,” said Rev. Dr. Fredi Jackson. “I’m thankful that someone is trying to fix the mess of the housing market. So many people need help right now.”
About one-fifth of Oregon homeowners are currently underwater. They are therefore unable to take advantage of historically low mortgage rates and are at much greater risk of default and foreclosure. Merkley's plan would create a temporary trust to purchase mortgages issued by private lenders that meet the program's criteria. After refinancing, average underwater homeowners would, depending on the option they chose, see their monthly payment drop sharply or dramatically cut the amount of time before they begin building positive equity in their home.
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