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LOCAL EDITION SECONDARY MARKET Senator Pitches Bond Sales to Fund Refinancing Plans SEN. JEFF MERKLEY HAS ANNOUNCED A PROPOSAL THAT WOULD GIVE DISTRESSED BORROWERS ACCESS TO LOWER RATES THROUGH A TRUST FUELED BY BOND SALES. OREGON // About 25 percent of homeowners are underwa- ter, according to the latest data from CoreLogic. That's about 12.1 million homeowners who owe more on their mortgage loan than their home is now worth. While the government has made a few attempts to help these struggling homeowners through its Home Affordable Refinance Program—versions 1.0 and 2.0—it has reached just 1.3 million homeowners since its debut in 2009, according to data from the Federal Housing Finance Agency (FHFA). While the FHFA reports the announced a plan recently to allow underwater homeowners to refinance at lower interest rates through the creation of a Rebuilding American Homeownership Trust. Merkley points out that banks Sen. Jeff Merkley (D-Oregon) neither accrue interest nor receive payments for five years. Merkley's newly released plan won't refinance loans for under- water borrowers because "there is no one who will buy that loan." "So let's change that," he says, standing before a whiteboard on which he illustrates his plan in simple terms during a YouTube video released recently. His plans call for a one-time trust he says is similar to the Homeownership Loan Corporation created during the Great Depression. As banks refinance under- water homeowners, the trust would purchase the loans from the banks. Meanwhile, the trust would receive funding from bond sales. "The beauty of this arrangement is that not a single tax dollar goes into it, program is making progress, one senator is taking things into his own hands, announcing a new plan and urging that it be "piloted immediately." 78 | THE M REPORT types of loans: a 15-year loan at a low interest rate, a 30-year loan at a low interest rate, and a two-part loan consisting of a collateral- ized and an uncollateralized loan. The uncollateralized loan would " Merkley says in his video. The trust would support three economic recovery is held back by $700 billion in negative eq- uity in the housing market," Dr. Joseph Stiglitz, economics profes- sor at Columbia University, said, "If adopted, this proposal would help to stabilize the housing mar- ket, create new jobs, and boost our overall economy." Mark Zandi, chief economist problem have fallen well short," Zandi said. "Sen. Merkley's plan is an ambitious one and should be carefully considered." The National Association of has already received some approval. Acknowledging that "America's FHFA Pushes Back on Eminent Domain Policy THE GOVERNMENT ORGANIZATION SPEAKS OUT AGAINST CONTROVERSIAL PLANS TO ALLOW FOR NEW MORTGAGE-RELATED APPLICATION OF EMINENT DOMAIN LAWS. at Moody's Analytics called the plan "a creative and bold effort." "Previous attempts to solve this CALIFORNIA // The Federal Housing Finance Agency (FHFA) has issued a notice of warning regarding the controversial use of eminent domain recently proposed in San Bernardino County. Officials there are considering Realtors (NAR) also expressed its support for the plan, as NAR President Moe Veissi said Merkley's idea "is exactly the innovative approach that our nation must take to ensure a sustained housing recovery." However, there are some the use of eminent domain to seize underwater mortgages. The mortgages would be taken at fair market value, and then restructured into new loans with terms reflecting the current market. Chicago and Berkeley are also exploring the proposed use of eminent domain. In the notice, which was naysayers. One commenter responded to the YouTube video by saying the plan is "setting up conditions nearly identical to what created the housing bubble." sent to the Federal Register, FHFA stated it had "significant concerns about the use of eminent domain to revise existing financial contracts and the alteration of the value of SECONDARY MARKET ANALYTICS SERVICING ORIGINATION