Meanwhile, the administration should investigate ways to facilitate more refinancing. Fannie Mae and Freddie Mac, the government-controlled mortgage companies, hold millions of mortgages from borrowers who are current on their payments but are unable to refinance because their home equity or credit scores have declined since they first took out their mortgages. Since Fannie and Freddie are at risk if those borrowers default, it makes sense for them to allow the borrowers to refinance to a lower rate, reducing both their payments and the risk that they will be unable to pay.
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