The current Federal Housing Administration (FHA) Secure program is expected to help only 44,000 subprime borrowers, or 5 percent of those who are more than two months behind in their payments.

A study circulated by the American Securitization Forum suggests that one way around this poor showing is by allowing borrowers delinquent for any reason to refinance into an FHA loan. Currently, the option is available only to borrowers facing a rising interest rate.

Another problem with the program is that the FHA Secure program is unattractive to lenders because they may have a hard time selling the loans. That's because the agency's own securitization arm, facing pressure from traders, pledged to keep its FHA Secure loans out of standard Ginnie Mae bonds.

Source: Reuters News (02/05/2008)