Obama Home Refinancing Effort Hits Banks’ Risk, Capacity Limits
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White House efforts to push widespread refinancing of mortgages for homeowners who owe more than their properties are worth may be limited by banks’ stretched capacity to originate loans and their concerns that the borrowers are too risky.
By the end of May, 78,000 homeowners with mortgages at least 5 percent larger than the value of their homes had refinanced into lower interest rates under the new rules for the Home Affordable Refinance Program, the Federal Housing Finance Agency reported yesterday. Of those, 11,000 borrowers were defined by the agency as deeply underwater, owing at least 125 percent of their homes’ value.