Continued from page 2

Some prominent Republicans have endorsed the idea of mass refinancings for underwater homeowners, however. Glenn Hubbard, the George W. Bush White House’s chief economist, said such a measure would bring average mortgage relief of $3,200 a year to as many as 13 million households and flood the economy with $40 billion a year in extra cash and spending by consumers who take advantage of the program. Economists say that would provide a powerful shot in the arm to the economy.

Administration role

Caught in between is President Obama.

His administration did not comment on the Fed’s ideas, though Mr. Obama has said he regretted not doing more to help the stressed housing market. In recent months, federal agencies have floated limited proposals to modify loans and streamline refinancings like the Fed recommended.

The administration has been hobbled by its inability to get Senate confirmation for key appointees, including a new head of the Federal Housing Finance Agency, the agency that oversees Fannie and Freddie. But the White House is divided on what to do, as it has echoed Republicans’ call for winding down and eventually eliminating Fannie and Freddie.

Analysts say many of the Fed’s ideas could be carried out by executive order should the White House take a potentially controversial stand on housing before Election Day.

Arguing that it would fit with Mr. Obama’s “we can’t wait” campaign of taking steps to aid the economy without waiting for authorization by Congress, House Democrats from California urged Mr. Obama in a letter last week to replace the acting head of the Housing Finance Agency, Ed DeMarco, through a recess appointment, as Mr. Obama recently did with several other high-profile appointees this month.

Mr. DeMarco, reluctant to do anything that would rile Congress and deepen the losses at Fannie and Freddie, has shunned more-aggressive proposals and approved only limited-assistance programs for homeowners.

But Brian Gardner, an analyst at Keefe, Bruyette & Woods, said the administration has struggled to find a new administrator for the Housing Finance Agency since a previous candidate withdrew his nomination, and there is no candidate waiting in the wings to replace Mr. DeMarco. He doubts Mr. Obama will announce any new, high-profile housing programs.

“While there would be some political benefit to replacing DeMarco and rolling out a new mortgage proposal,” the move would “also carry some political risks since it can be argued that any costs to [Fannie and Freddie] are ultimately borne by the taxpayers,” he said.