Plans by John Kerry on funding of mortgage refinances

In a press statement Sen. John Kerry said that it will be possible to refinance subprime mortgages taken by Massachusetts borrowers using tax-exempt bonds under economic stimulus package cleared by a U.S. Senate Committee recently.

Kerry said that, if the bond provision of the bill which has been developed as an economic stimulus package survives negotiations, it will mean that states would have near about $10 billion for use as tax-exempt bonds. These bonds could be used to help borrowers refinance their subprime mortgages into mortgages with lower rates.

Kerry also informed that communities that have been affected most due to recent foreclosures in Massachusetts like, Lawrence & Brockton will benefit as some share from $10 billion fund will flow into Massachusetts.

This proposed mortgage plan by Kerry & Sen. Gordon Smith has been praised by many including Thomas R. Gleason, executive director of MassHousing, which is a quasi-government agency.

This provision (called as Kerry-Smith provision) in the bill for tax-exempt bonds will help states sell another $10 billion as federally tax exempt mortgage revenue bonds. Part of these funds will flow through to agencies such as MassHousing which will then have more money to make available affordable mortgages for borrowers.