The Obama administration is considering expanding its mortgage-refinancing programs to include borrowers whose mortgages are not backed by the government and who owe more than their homes are worth, the Wall Street Journal reported today. About 22 percent of all homes with a mortgage, or around 10.8 million homes, were worth less than the outstanding balance at the end of June, according to CoreLogic. That number has fallen from 12.1 million at the end of last year as home prices have picked up, but around 10 percent of all homeowners with a mortgage are still deeply underwater. Fannie and Freddie own or insure about half of all home loans, and most underwater borrowers with their backing can refinance to get a lower mortgage rate as long as they are current on their loans. That initiative has benefited holders of more than 330,000 underwater mortgages through October this year, up from around 60,000 in all of 2011. Officials at the Treasury Department and the White House now would like to include borrowers who have been locked out because their loans are not backed by the firms. Those loans are held by private lenders or investors, and some of them were issued by subprime lenders and bundled into securities by Wall Street firms.
