The Obama administration may be looking to expand the number of borrowers who can refinance their mortgages.

The White House is considering a proposal that would authorize Fannie Mae and Freddie Mac to guarantee repayment by borrowers whose homes are underwater and whose mortgages aren't backed by the government, the Wall Street Journal reported Wednesday.

The move would require Congress to authorize a change to the companies' charters that would allow Fannie and Freddie to back billions of dollars in loans and to charge higher rates to borrowers to offset the risk.

Roughly 22% of homes in the U.S. with a mortgage, or about 10.8 million homes, were worth less than the amount of the loan they secured at the end of June, according to CoreLogic (CLGX), a company that provides financial data.

Fannie and Freddie currently allow borrowers whose loans are insured by the companies to obtain a lower rate as long as the borrowers are up-to-date on their payments. Officials at the Treasury Department and the White House would like to add borrowers who are currently blocked from the program because their loans are held by investors or private lenders.

The Federal Housing Finance Agency, which oversees Fannie and Freddie, has suggested it would support the administration's effort, the Journal reported, citing people familiar with the discussions.

The administration also is said to be considering allowing borrowers whose loans are underwater to refinance their loan as part of the Home Affordable Modification Program, which can lower monthly mortgage payments for borrowers who face an "imminent" risk of defaulting. The administration's proposal would redefine "imminent default" to include borrowers whose homes are underwater even if they are current on their payments.

An FHFA spokeswoman declined to comment on the report. A spokesman for the Treasury Department did not respond immediately to a request for comment.

The proposals follow attempts last summer by Senate Democrats to allow more Americans to refinance their mortgages. Sen. Jeff Merkley (D-Ore.) proposed to allow the administration to use funds already appropriated to buy underwater mortgages and provide refinancing backed by the government. A Merkley spokesman told American Banker in August that gridlock in the Senate Banking Committee underscored "the need for the administration to use the tools and authorities it currently has to expand refinancing opportunities for Americans underwater on their homes."

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