WASHINGTON -- Rep. Joseph P. Kennedy 2d, D-Mass., thinks he has a solution to the problem faced by homeowners in New England who haven't been able to refinance their mortgages because of sliding property values.

The chairman of the House Banking subcommittee on consumer credit and insurance wants to create a new federal insurance program to cover the portion of the mortgage that exceeds the loan-to-value guidelines that banks and private mortgage insurers follow.

The Refinancing Assistance Act would create a new program administered by the Federal Housing Administration. It would be limited to owner-occupants with dependable records of meeting their mortgage payments and would be financed entirely by premium payments, Rep. Kennedy said.

He unveiled the bill last week at a Somerville, Mass., home whose owners have been unable to refinance their mortgage. The property has been valued at $167,000 and the existing mortgage has a principal balance of $166,000.

"It's time for the federal government to step up to the plate and provide a program to help the people who make up the backbone of our communities, the people who do the work and pay the taxes," Rep. Kennedy said.

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