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White House launches program for 'underwater' homeowners

WASHINGTON — The Obama administration is trying to jump-start its sputtering plan to tackle the foreclosure crisis with an effort to assist up to 1.5 million homeowners who owe more on their properties than their homes are worth.

The Federal Housing Administration will allow lenders to give these “under water” borrowers refinanced loans if the lender agrees to forgive at least 10 percent of the original mortgage amount.

The plan, which was announced in March, is being made available starting today.

The FHA said in a document published last month that between 500,000 and 1.5 million homeowners are projected to be helped. However, the Obama administration’s previous efforts to stem foreclosures have fallen far short of expectations.

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