Refinances surge under Obama program for underwater loans

The number of homeowners refinancing their loans through a popular federal program that allows underwater homeowners to get new rates surged to more than 2 million in November.

In November, almost 130,000 homeowners refinanced their loan through the Home Affordable Refinance Program, which allows underwater borrowers with Fannie Mae and Freddie Mac loans to get lower rates, according to the Federal Housing Finance Agency.

The Obama administration instituted a streamlined version of the plan last year.

Nearly 1 million loans were refinanced through the program between January and November of 2012, more than in any single year since the program was first launched earlier in the Obama administration, the FHFA said Tuesday.

Nevertheless, many Americans are not able to take advantage of the program because they have a loan that is not owned or backed by Fannie or Freddie.

And those high-cost loans remain a big drag on the economy.

In the meantime, all the refinancing activity is causing a bonanza for banks, which by one estimate may pocket $12 billion in extra revenue by refinancing loans, reported Times staff writer E. Scott Reckard last year.

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