Business

OVERNIGHT MONEY: Obama heads to Reno to tout housing refinance plan

by Vicki Needham and Peter Schroeder - 05/10/12 10:00 PM ET

Menendez and Boxer said Thursday that their bill could help at least 3 million homeowners — Boxer thinks many more — who are stymied by high fees or unfavorable appraisals that halt a refinancing.

“There’s no one solution, so we have to attack the problem from different angles,” Menendez said.

{mosads}Boxer said that while their legislation could gain enough support to get through Congress this year, she urged Edward DeMarco, acting director at the Federal Housing Finance Administration, to take the steps on his own.

Democrats have been critical of DeMarco’s efforts to help homeowners and the broader housing market.

“DeMarco can order this done,” Boxer said.

The lawmakers argue that their bill would help Fannie Mae and Freddie Mac, which have received more than $188 billion in taxpayer assistance, as well as save money and reduce the number of defaults.

Lawmakers and the Obama administration are keen to act soon because mortgage rates are at or near historic lows.

The rates for 30-year and 15-year fixed mortgages fell to fresh record lows this week. The 30-year loan rate ticked down to 3.83 percent, the lowest since the 1950s, while 15-year rates, a common loan used for refinancing fell to 3.05 percent, another record.

White House spokesman Jay Carney insisted that lawmakers should be able to find common ground and pass a bill, if not several, that would help curb foreclosures and bolster the slowly recovering housing market.

“These are the kinds of initiatives that traditionally enjoy bipartisan support,” Carney said. “They’re the kinds of initiatives that outside independent economists identified as things that would have an immediate impact on economic growth and job creation.”

Housing and Urban Development Secretary Shaun Donovan said this week that legislation is urgently needed to help more homeowners refinance their mortgages, prop up the housing market and boost the economic recovery.

He cautioned that while mortgage rates are low now, they could begin to rise, negating the effects of helping homeowners and giving them the extra pocket money they need.

“It’s imperative to act soon so homeowners can take advantage of record-low mortgage rates,” Donovan told the Senate Banking Committee. “There’s a real urgency here because interest rates today are at the lowest level they have ever been for a 30-year mortgage,” he said.

“But as the economy continues to improve, the expectations are this window of record-low interest rates may not last for a long time.”

WHAT ELSE TO WATCH FOR

He invested … poorly: The Investment Company Institute is hosting its membership meeting in Washington on Friday. Securities and Exchange Commission Chairwoman Mary Schapiro is slated to speak. Expect new regulations on money market funds to be a hot issue, as regulators push for heightened oversight amid industry resistance. Not enough to garner your attention? Well, she’ll be followed up by the mastermind of the “Star Wars” and “Indiana Jones” films, George Lucas. He will talk about the parallels between making movies and managing assets. May the force be with you.

BREAKING NEWS

Beware the fiscal cliff: Federal Reserve Chairman Ben Bernanke lunched with Senate Democrats on Thursday to let them know that a fiscal mess and damage to the economy lies ahead if they can’t complete work on important tax and spending issues by year’s end.

Taxes will increase by an estimated $5 trillion over the next decade if Congress does not extend an expiring law by Dec. 31. The nation also faces an automatic $1.2 trillion spending cut and the expiration of the payroll tax holiday and benefits for the unemployed.

It’s gettin’ kinda heavy: The U.S. Postal Service announced Thursday that it lost $3.2 billion in the fiscal year’s second quarter, continuing a streak of heavy losses at the struggling agency.

The service, which currently loses about $25 million a day, said its heavy losses were due to a required prepayment on retiree healthcare and the continuing decline in first-class mail volume.

In his response to the newest figures, Postmaster General Patrick Donahoe said that his agency was doing what it could to staunch its losses, but needed Congress to act on legislation to solidify its finances.

Screeeech: That’s the sound of the a bill reauthorizing the Export-Import Bank coming to a halt in the Senate. The bank will lose its charter May 31 if the Senate doesn’t act. The bill stalled on Thursday in the Senate after Republicans asked to offer a student loan bill as an amendment.

The Ex-Im Bank bill easily passed the House on Wednesday with 330 votes. The bill represents a bipartisan compromise between House Majority Leader Eric Cantor (R-Va.) and House Minority Leader Steny Hoyer (D-Md.).

Earlier in the day, Senate Majority Leader Harry Reid (D-Nev.) had been unable to get consent to move directly to consideration of the bill. He told reporters that GOP leadership staff has requested to offer six or so amendments and he is willing to consider those that are germane.

He lamented the fact that the GOP has blocked a vote on the Democrats’ student loan bill but is trying to get a vote on a Republican alternative via the Ex-Im bill.

A cloture vote on the motion to proceed to the Ex-Im reauthorization is set for Monday.

Well, that was close: The House voted Thursday to override steep cuts to the Pentagon’s budget mandated by last summer’s debt deal and replace them with spending reductions to food stamps and other mandatory social programs.

While doomed in the Senate and opposed by the White House, the legislation, which would reduce the deficit by $243 billion, is a Republican marker for post-election budget talks with the White House.

Members approved the Sequester Replacement Reconciliation Act in a party-line 218-199 vote. As expected, the bill was supported by nearly all Republicans — only 16 opposed it, and no Democrats supported it.

There’s a first: The House on Thursday approved the first appropriations bill of the year, a measure that spends $51 billion on the Departments of Commerce and Justice, NASA and other related agencies.

The spending bill was approved in a 247-163 vote in which eight Republicans voted against it, reflecting opposition to the amount spent in the bill. It got the support of 23 Democrats.

LOOSE CHANGE

Talking shop: Treasury Secretary Timothy Geithner met with top corporate leaders to discuss the state of the economy, The Wall Street Journal reported Thursday.

A handful of chief executives participated, including Klaus Kleinfeld, chairman and chief executive of Alcoa, Doug Oberhelman, chairman and chief executive of Caterpillar, Ken Powell, chairman and chief executive of General Mills, Jim Rogers, chairman, president and chief executive of Duke Energy, Enrique Salem, president and chief executive of Symantec and Patricia Woertz, chairman, president and chief executive of Archer Daniels Midland.

ECONOMIC INDICATORS

Michigan Sentiment: Thomson Reuters/University of Michigan survey puts out its report on consumer confidence for May.

Producer Price Index (PPI): The Labor Department will release its report for April that tracks the prices of goods at the wholesale level. The market tracks PPI closely because it represents prices for goods that are ready for sale to consumers.

WHAT YOU MIGHT HAVE MISSED

— Trade gap widens in March on record imports
— Layton tapped to head Freddie Mac
— White House ramping up efforts to boost tourism
— Jobless claims fall again as labor market continues recovery
— Report: Subsidiaries support 21 million jobs
— Dems looking to slim down big banks
— Banking regulator lays out plan to avoid future bailouts
— Conflict mineral crackdown draws critiques