Parts of mortgage refinancing package don't need Congress' OK

WASHINGTON -- Although opponents on Capitol Hill pronounced it dead before arrival, President Obama's new mortgage refinancing package contained far more than legislative proposals.

Significant portions of it that have received little media coverage require no approval from Congress and could begin affecting consumers within weeks.

Here's a quick rundown on key segments of the proposals:

● For underwater homeowners whose mortgages aren't owned or guaranteed by Fannie Mae or Freddie Mac, the President's marquee proposal to help with refinancing into a 4 percent mortgage is not likely to be of assistance.

The plan's core concept of funding the rate cut by levying a fee on the largest banks would be a nonstarter politically even if this weren't an election year.

● Refinancings can be speeded up administratively by key executive branch agencies, and the new program directs them to do so within the next few weeks wherever possible.

For example, the Federal Housing Administration will be removing a major barrier for lenders to "streamline" refinancings for current, nondelinquent borrowers who want to take advantage of today's lower rates.

The FHA no longer will count streamlined refis -- where some standard underwriting requirements are waived -- against lenders' performance ratings on delinquencies.

The fear of getting a poor rating is a powerful deterrent for many lenders considering streamlined refis, because they can lose their eligibility to do loans for the FHA.

● Although some reforms already are in place, the White House is requiring all federal housing agencies to enforce minimum standards on mortgage servicers, including mandating immediate offers of forbearance or loan modification at the earliest hints that an owner is facing financial strains.

For homeowners who are turned down for a modification or other assistance, the plan requires a guaranteed right of appeal in "a formal review process" to give the borrowers a second chance.

● The federal regulatory agency that oversees Fannie Mae and Freddie Mac in conservatorship disagrees, but the White House believes that both companies could eliminate all closing costs for large numbers of underwater borrowers who want to refinance into shorter-term loans and rebuild their equity.

The program would eliminate all closing fees for borrowers who opted for loan terms of 20 years or less. The refinancers generally would pay the same amount per month on their loans, but the shorter term of the loans would reduce the principal much more rapidly than a standard 30-year payoff schedule.