A proposal by the Obama administration to help more struggling borrowers refinance into cheaper loans is prompting questions: Could it prompt an increase in interest rates, after a long period of low rates? And is this a program that can relieve the housing crunch, or just another Band-Aid?

The plan — announced in President Obama's third State of the Union address—so far lacks much detail, although it would be paid for with a fee on large banks, and some expect it could even target loans not backed by Fannie Mae and Freddie Mac. But while some see benefits in such a broad scope for the program, others say it could be an administrative nightmare.

Subscribe Now

Access to a full range of industry content, analysis and expert commentary.

30-Day Free Trial

No credit card required. Access coverage of the securitization marketplace, including breaking news updated throughout the day.