* Obama administration, FHFA seen detailing refinance plan
* Lawmakers expect legislation proposals
* Fed official suggests reaching beyond Fannie, Freddie
By Thomas Ferraro and Rachelle Younglai
WASHINGTON, Oct 20 The Obama administration and
the regulator for Fannie Mae and Freddie Mac are expected to
unveil new steps to help distressed homeowners in the next week
or two, a senior congressional aide said on Thursday.
The aide commented on the plan after Democratic Senator
Dianne Feinstein said the Federal Reserve planned to send
Congress "legislative recommendations" on housing.
The aide said Feinstein "misspoke for a second" and meant
the administration and the Federal Housing Finance Agency.
After Senate Democrats met with Fed Chairman Ben Bernanke,
Feinstein told reporters the central bank chief had stressed
that more needed to be done to help the housing sector.
"They are going to submit a list of recommendations next
week," Feinstein told reporters. She said the pending proposals
are "legislative recommendations we can look at."
Senator Mark Warner, who also attended the meeting, said
Bernanke spoke about what can be done to get mortgage refinance
moved "down the field."
"There might be some ideas we are going to have shortly on
that," he told reporters after the meeting.
It is unclear what Congress might do given deep political
divisions in the House of Representatives and the Senate.
A handful of Senators are trying to advance a proposal that
would make it easier for middle-class Americans to buy homes in
expensive real estate markets.
Separately, the administration is pushing the regulator for
Fannie Mae and Freddie Mac , the two biggest
U.S. housing finance providers, to allow more homeowners who
owe more than their homes are worth to refinance their loans at
Treasury Secretary Timothy Geithner said on Tuesday he
hoped a proposal could be laid out "in the coming days." A
source familiar with the plans told Reuters they could be
unveiled as early as Monday.
The Fed has been exploring what steps it might be able to
take to spur a more vigorous economic recovery and pull down an
unemployment rate that has been stuck above 9 percent for five
On Thursday, Fed Governor Daniel Tarullo said the central
bank should consider purchasing more mortgage-backed
He said an MBS purchase program could be made more
effective if further steps were taken to help so-called
underwater borrowers refinance. He said such an effort need not
focus only on loans backed by Fannie Mae and Freddie Mac, but
that legislation might be needed if policymakers wanted to
reach other homeowners.
The U.S. central bank has kept overnight interest rates
near zero since December 2009 and has already bought $2.3
trillion in government and mortgage-related bonds.
In September, it decided to shift its holding of bonds to
try to put more downward pressure on longer-term rates. It also
said it would begin reinvesting principal payments from its
holdings of mortgage-related debt to help housing.