Fannie Mae offices in Washington, D.C.
Fannie Mae offices in Washington, D.C. - 
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TESS VIGELAND: Here's a startling statistic: Foreclosures in California are up 800 percent from last year at this time. Today the nation's two mortgage giants weighed in on the ongoing subprime mortgage crisis. At a hearing on Capitol Hill the leaders of Fannie Mae and Freddie Mac said they'll unveil new programs this summer to let many subprime borrowers refinance their home loans. But some in Congress say that kind of assistance needs to be bolstered by new federal oversight of lenders. Marketplace's Steve Tripoli has the story.

STEVE TRIPOLI: The growing sense that many borrowers need relief spurred today's announcement. Fannie Mae's Alfred King says the cheaper re-fi's being offered could attract lots of interest.

ALFRED KING: About 1.5 million borrowers might be able to take advantage of this.

It won't be a panacea. Struggling borrowers will get payments that won't go up as much or as quickly as their current loans. That could save their houses. But many refinancings could extend the length of mortgages, meaning more money paid over time.

House Financial Services Committee Chairman Barney Frank says Fannie and Freddie helped out today in a mess that's not of their making. It's true that means indirectly aiding lenders and investors who made risky loans possible, since helping borrowers means they can make good on those loans. But Frank says that given the size of the mess, that's a necessary evil.

BARNEY FRANK: We do think it would be better if the investors took some loss. But we are prepared to see that the investors having taken some loss, get some repayment, because that is better than having foreclosures which are terribly disruptive to the individuals and to the neighborhoods.

Beyond helping borrowers there's the issue of preventing future subprime debacles. Frank says Congress can build on Fannie and Freddie's work there.

FRANK: You now have people who are making many of these loans, they're not largely coming from banks, they're coming from people who aren't regulated in some cases. And I do think there needs to be a uniform regulatory standard going forward.

One of the ironies of Fannie and Freddie's offers today is that loans they back for subprime borrowers already forbid most of the costs and provisions that are causing so much trouble.

Yet somehow they've been able to make money on loans most subprime lenders say can only be made at higher prices.

I'm Steve Tripoli for Marketplace.