...maybe for Senator Isakson who teams with a liberal Senator such as Boxer on anything, it can't be good - can it?
Refinancing a mortgage saves money for the borrower at the expense of the original investors - private, labor unions, school teacher pensions, public employee pensions, your own pensions, CDO/MBS investments, etc,. Someone takes a hit on any refinancing by lower interest rate, less amount to be paid back, or lose the investment return entirely. And it's a simple process when only one investor/institution owns the note - that one entity can decide on whether or not to lower the interest rate and retain the investment vehicle, or lose it to someone else. That's probably about 20% of all mortgage loans these days, but 80% are commingled with 2 or more investor-owners of vehicle.
These senators' proposal tries to eliminate risk based fees (in other words, their investments are baked by US taxpayers and they don't need to pay for risk) and allow people who are paying "as promised" get a lower interest rate if they owe more than the home is worth.
Source http://mdjonline.com/view/full_story/16305418/article-The-Economy---Obama-wise-to-tag-onto-Isakson-proposals?instance=lead_story_left_column
Source: http://mercatus.org/expert_commentary/boxer-isakson-refinancing-plan-banks
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