Based on J.P. Morgan's data, about one-fifth of the nation's 50 million borrowers have mortgage loans more than 5 percent higher than the current value of their homes. They would not qualify under the loan refinancing plan of Fannie Mae and Freddie Mac.



Similarly, Christopher Viale, head of the nonprofit Cambridge Credit Counseling Corp., said there are about 10 million families that would not get any help from the Obama program. He said these families are not in default because they are charging their credit cards.

What is troubling is that these unqualified homeowners would be paying credit card debts forever because they are only paying the minimum monthly payments. Families that are in danger of tax foreclosures are also left out of the program, possibly because of the relatively lower number of tax foreclosures in comparison to lender foreclosures.

Miami resident Mark Klepper is an example of a homeowner that will possibly go into foreclosure because his mortgage loan is too high. Klepper's mortgage loan has ballooned to $1,064,000 on the home he purchased for $585,000 in 2004. With the program's exclusion of loans above $729,750, Klepper's loan is far above the maximum qualifying loan. There could also be formerly high-income earners like Klepper at risk of tax foreclosures because of the downturn.

The Treasury Department said about two percent of mortgage loans exceed the $729,750 limit. Bill Apgar, a top manager at the Department of Housing and Urban Development, said the program had to choose to put limits to be able to help more people in the lower income level.

But Christopher Mayer, real estate professor of Columbia Business School, questioned the decision of Obama's administration not to help more Americans with the billions that he got from Congress. He said the refinance scheme has excluded homeowners whose mortgages are not owned or guaranteed by Fannie Mae or Freddie Mac and these homeowners are about half of all mortgage borrowers. Many more persons are in danger of tax foreclosures because of current economic difficulties, but they would not be helped by the program.

Analysts and economists including Paul Willen of the Federal Reserve Bank of Boston said foreclosures will still continue because of the limits of the Obama program and because of continued downsizing and layoffs that have also been increasing tax foreclosures.