American International Group Inc.’s mortgage-insurance unit should remove policies that can prevent homeowners from refinancing mortgages, three U.S. senators wrote in a letter today.
United Guaranty Corp. is the only mortgage insurer that hasn’t removed barriers to refinancing, senators Barbara Boxer of California, Robert Menendez of New Jersey and Herb Kohl of Wisconsin, all Democrats, wrote in the letter addressed to Chief Executive Officer Kim Garland.
The unit of the bailed-out insurer is unwilling to offer the same protections on defective loans that competitors are granting to aid the Home Affordable Refinance Program, Bloomberg News reported in November. President Barack Obama has said expanding HARP will make cheaper credit available to more homeowners with mortgage rates near record lows.
“United Guaranty’s policies are harmful both to your customers and to the taxpayers,” the senators wrote in the letter. “This is particularly troubling given that United Guaranty is a subsidiary of American International Group, which itself has benefited from taxpayer assistance.”
United Guaranty has participated in HARP since 2009 and refinanced more than $5.3 billion worth of loans, the firm said in an e-mailed statement.
“United Guaranty’s review of new servicer loans in no way interferes with borrowers’ ability to take advantage of HARP or other loan-modification programs that help families retain their homes,” according to the statement.