WASHINGTON, June 28 -- The office of Sen. Robert Menendez, D-N.J., issued the following news release:
U.S. Senators Barbara Boxer (D-CA), Bob Menendez (D-NJ) and Herb Kohl (D-WI) today sent a letter to Kim Garland, the CEO of mortgage insurer United Guaranty Corporation, urging him to reconsider the company's policies that are limiting or preventing homeowners from being able to refinance at today's record low rates.
Currently United Guaranty is the only mortgage insurer that has not agreed to voluntarily remove barriers to refinancing in response to changes made to the Home Affordable Refinance Program (HARP) last October. All the other mortgage insurers have concluded that helping underwater borrowers refinance at lower rates benefits all parties - homeowners reduce their monthly payments and their risk of default, mortgage insurers lower their risk of exposure and their likelihood of paying out a claim, and taxpayers benefit as fewer Fannie Mae and Freddie Mac loans go into foreclosure.
In the letter, the Senators wrote, "United Guaranty's policies are harmful both to your customers and to the taxpayers who have provided generous support to Fannie Mae and Freddie Mac. This is particularly troubling given that United Guaranty is a subsidiary of American International Group (AIG), which itself has benefited from taxpayer assistance."
Senators Boxer, Menendez and Kohl also asked Garland to respond to a series of questions to explain why United Guaranty has taken a "different path" that diverges from the "industry consensus that removing barriers to refinancing is good for business." The Senators urged Garland to change the company's policies to "allow your customers the same opportunities to refinance that customers of every other mortgage insurance company already enjoy."
Senators Boxer and Menendez are the authors of the Responsible Homeowners Refinancing Act, legislation that would help remove remaining barriers that are keeping borrowers who are current on their payments from refinancing their loans.
The full text of the Senators' letter and their questions to United Guaranty are included in this link: http://www.menendez.senate.gov/newsroom/press/release/?id=fd5e9abe-51b2-406b-b82c-9abd9f716143
TNS MJ88-120629-3932682 StaffFurigay