By Kathleen Madigan A DOW JONES NEWSWIRES COLUMN
NEW YORK (Dow Jones)–The problems surrounding housing are like boorish dinner guests that won’t leave. The federal government has tried several times over the past three years to fix these troubles, but they’re hanging around–dragging down the economy.
Now some economists are floating an idea to give housing troubles the boot: blanket mortgage refinancings.
Glenn Hubbard, the dean of the Columbia Business School, and his and senior vice dean, Christopher Mayer, are promoting a plan to direct all public and quasi-public agencies that guarantee mortgages to streamline the refinance process so that all homeowners can take advantage of today’s near record-low rates.
Their idea is simple: the agencies would direct loan servicers–the middlemen who oversee loan payments–to send a short application to eligible borrowers to refinance at the prevailing rate (now about 4.38% for a 30-year fixed loan).