Under the plan, any homeowner current on his or her mortgage could take advantage of historically low lending rates. Mortgage rates have been below 4 percent for months.
The program would be paid for by a small fee on large banks, senior administration officials said.
Administration officials offered few details but estimated savings at $3,000 a year for average borrowers. It’s likely that millions of homeowners would be eligible, but they would have to seek out refinancing options under the program with their lender. Other government programs allow lenders to seek out potential applicants.
Further details of the program will likely be released in legislation in the next few days, officials said.
The new program would expand the Obama administration’s Home Affordable Refinance Program, which allows borrowers with Fannie and Freddie-backed loans to refinance at lower rates. Few people have signed up for that program. Many “underwater” borrowers — those who owe more than their homes are worth — couldn’t qualify.
About 1 in 4 Americans with a mortgage — about 11 million — are underwater, according to CoreLogic, a real estate data firm. Roughly 1 million homeowners have refinanced through the refinancing program. Government officials had estimated it would help 4 million to 5 million homeowners.
About half of all U.S. mortgages — about 30 million home loans — are owned by non-government lenders.
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