Lenders Skeptical about FHA Role in Rescuing Borrowers.

Washington -- The Bush administration is depending on the Federal Housing Administration to refinance a lot of subprime borrowers to stem rising foreclosures, including delinquent homeowners under its FHA Secure program.

But lenders have found the FHA Secure program difficult to implement and too narrowly targeted. Industry experts consider the refinancing program President Bush unveiled just before Labor Day to be more of a political gesture by the White House than a viable option for many struggling homeowners.

"It is nice that they offered this FHA Secure product, but it addresses a very small part of the mortgage population that is in need of relief," said Salvatore Tomaselli, chief executive of SearchMyLoan.com.

He noted that 1.2 million subprime borrowers are in jeopardy of going into foreclosure.

David Zugheri, the president and founder of First Houston Mortgage, said the refinancing program has too many limitations that disqualify borrowers. "Where the rubber meets the road, we have not placed one borrower in a FHA Secure loan."

The Department of Housing and Urban Development launched FHA Secure Sept. 5 to assist subprime borrowers who were current on their monthly payments up to the time of the reset on their adjustable-rate mortgage.

Four thousand delinquent borrowers have applied for a FHA Secure refinancing as of Jan. 10, and 1,021 loan transactions have closed, which is below expectations.