White House may be looking to expand the number of borrowers who can refinance their mortgages.
Brian Browdie, American Banker
The White House is considering a proposal that would authorize Fannie Mae and Freddie Mac to guarantee repayment by borrowers whose homes are underwater and whose mortgages aren’t backed by the government, the Wall Street Journal reported Wednesday.
The move would require Congress to authorize a change to the companies’ charters that would allow Fannie and Freddie to back billions of dollars in loans and to charge higher rates to borrowers to offset the risk.
Roughly 22% of homes in the U.S. with a mortgage, or about 10.8 million homes, were worth less than the amount of the loan they secured at the end of June, according to CoreLogic (CLGX), a company that provides financial data.