WASHINGTON — Last week's session of the House Financial Services Committee was surprise to learn that the Federal Housing Administration will expand it FHASecure refinancing program.

Federal Housing Commissioner Assistant Secretary for Housing Brian D. Montgomery announced the expansion at a committee session. He said it will help more homeowners who are struggling to keep up with mortgage payments on high-cost subprime loans, Montgomery estimated the change would help about 500,000 families refinance into prime, FHA-insured mortgages by year-end. "We want to be able to help families who are in the right house but the wrong mortgage," said Montgomery.

The FHA expansion means that the agency will be more flexible with borrowers who have fallen behind on as many as three payments, allowing them to qualify for a new federally insured loan at the maximum 97% value of their homes. The change would also include borrowers who received a voluntary mortgage principal write-down from their lender. "Our plan will help hundreds of thousands of desperate families who have no place else to turn for safer, lower cost ways to keep their homes," said Montgomery.