The White House is looking to roll out a fresh round of refinancing, this time adding mortgages that aren't backed by the government, reports the Wall Street Journal. Some 22% of mortgages—about 10.8 million—exceeded the value of the homes they backed in June, down sharply from 12.1 million at this time last year, but still a serious drag on the economy. The CBO estimates that refinancing could save a homeowners about $2,600 annually, although only about 5% of all mortgages would likely be eligible.
By getting swamped homeowners out from overwhelming debt, the hope is families will be able to spend elsewhere and boost the economy. Current measures, introduced in October 2011, have so far helped 330,000 homeowners. "It has been unbelievably successful," said the head of the mortgage-backed securities group at Pacific Investment Management Co. However transferring thousands of mortgages to government-backed mortgage companies will require congressional approval to change Fannie's and Freddie's charters, a move the mortgage industry is skeptical about without more guarantees. Given Fannie and Freddie's poor track record of pricing high risks during the bubble, asks one skeptic, "what gives us the belief they can price it better today?" (Read more mortgage stories.)