Expanding, Streamlining Mortgage Refinances

Published: June 27, 2012

A Bipartisan Opportunity to Help Homeowners (Excerpt)

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A bill in the U.S. Senate would more than double the number of homeowners who could refinance under a federal mortgage program and more than double their potential savings, a Columbia University Business School study estimates. Senate bill 3085, introduced by Senators Robert Menendez and Barbara Boxer, would expand and streamline refinancing opportunities under the existing Home Affordable Refinance Program (HARP).  The study estimates this new legislation would increase the total number of homeowners who refinance under HARP to up to 13 million and produce total potential savings of $35 billion a year.

In a separate analysis, the researchers also tallied the estimated number of mortgage holders in each state who could potentially be eligible for a refinancing under HARP and how much they could save in lower interest payments if the legislation were passed:

Estimated Savings from Streamlined Refinancing*

Estimates by Alan Boyce, R. Glenn Hubbard, Christopher Mayer, and James Witkin at The Paul Milstein School of Real Estate at Columbia Business School.  See http://www4.gsb.columbia.edu/realestate/research/housingcrisis.

State

 Annual Interest Savings
(Millions of Dollars)

Number of
Eligible Mortgages

Average Savings
per Refinance

Alabama

$438.4

                      162,436

$2,699

Alaska

$73.6

                        18,142

$4,054

Arizona

$937.2

                      318,378

$2,944

Arkansas

$187.5

                        78,949

$2,375

California

$5,669.8

                   1,371,678

$4,133

Colorado

$851.6

                      253,639

$3,358

Connecticut

$532.6

                      142,018

$3,750

Delaware

$175.5

                        49,779

$3,525

District of Columbia

$120.9

                        27,143

$4,267

Florida

$2,975.1

                      980,316

$3,035

Georgia

$1,281.5

                      431,411

$2,971

Hawaii

$220.5

                        43,846

$5,029

Idaho

$218.8

                        77,667

$2,818

Illinois

$1,776.6

                      532,371

$3,337

Indiana

$582.2

                      253,294

$2,299

Iowa

$236.0

                      100,805

$2,341

Kansas

$243.4

                        95,822

$2,540

Kentucky

$324.3

                      131,798

$2,461

Louisiana

$368.8

                      134,317

$2,746

Maine

$160.5

                        52,027

$3,085

Maryland

$1,119.9

                      284,495

$3,937

Massachusetts

$1,000.4

                      238,133

$4,201

Michigan

$1,166.0

                      458,550

$2,543

Minnesota

$884.2

                      277,725

$3,184

Mississippi

$142.2

                        54,096

$2,628

Missouri

$630.2

                      247,220

$2,549

Montana

$114.6

                        38,242

$2,997

Nebraska

$145.0

                        61,411

$2,361

Nevada

$378.1

                      119,284

$3,170

New Hampshire

$231.2

                        67,227

$3,439

New Jersey

$1,667.3

                      402,431

$4,143

New Mexico

$240.8

                        83,128

$2,897

New York

$2,595.5

                      638,756

$4,063

North Carolina

$1,070.1

                      368,962

$2,900

North Dakota

$36.5

                        15,079

$2,420

Ohio

$1,027.5

                      427,650

$2,403

Oklahoma

$286.8

                      121,616

$2,358

Oregon

$668.7

                      201,625

$3,317

Pennsylvania

$1,365.1

                      469,712

$2,906

Rhode Island

$141.7

                        41,108

$3,447

South Carolina

$525.6

                      188,329

$2,791

South Dakota

$59.2

                        23,511

$2,520

Tennessee

$570.0

                      204,354

$2,789

Texas

$2,517.8

                      874,868

$2,878

Utah

$367.7

                      108,814

$3,379

Vermont

$80.8

                        26,920

$3,003

Virginia

$1,265.9

                      346,507

$3,653

Washington

$1,170.8

                      321,151

$3,646

West Virginia

$95.0

                        39,284

$2,419

Wisconsin

$504.5

                      171,875

$2,935

Wyoming

$58.4

                        18,923

$3,084

* The state totals differ from the 13 million people and $35 billion savings the researchers calculated nationally because the national estimates were based on more refined assumptions.