The Federal Housing Administration (FHA) Tuesday morning officially launched a new refinancing program to aid underwater borrowers, allowing lenders to write a new government-backed mortgage where up to 10% of the original loan amount will be forgiven.  

The effort, which was actually announced in March, hopes to bring relief to between 500,000 and 1.5 million homeowners.

To date, the Obama administration's efforts to urge lenders to modify loans and stem foreclosures have been met with mixed results.

Analysts at Barclays Capital estimated recently that the new refinancing program might only aid between 200,000 and 300,000 homeowners.

As of mid-June roughly 11 million homes -- or 23% of properties with a mortgage -- were considered underwater, according to figures compiled by CoreLogic Inc., Santa Ana, Calif.

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.