Lenders finally got Fannie and Freddie to toss out their policies of refusing refinances to borrowers with low home equity, but lawmakers think the lifeline the agencies are throwing consumers isn't long enough.

The agencies report that as many as 118,000 households could be eligible under the new programs. However, legislation introduced Nov. 15 by Rep. Joseph Kennedy, D-Mass, would create an FHA-insured program that would extend coverage to even more-namely the refinance-minded homeowners whose loan-to-value ratios exceeds the new 95% limit set by Fannie, up from 90%. Freddie Mac announced an identical program Nov. 24.

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