The Obama administration's stepped-up pressure on Fannie Mae and Freddie Mac to write down more underwater mortgages through a government program may not be as rejuvenating to the housing market as hoped, according to MF Global, a Washington-based policy research group. The Federal Housing Administration launched its Short Refi program Sept. 7 to place underwater borrowers into new government-insured mortgages if the lender or investor writes off the unpaid principal balance of the original first-lien by at least 10%. The Treasury Department set aside $14 billion of the Troubled Asset Relief Program for the short refinances. When it launched, analysts pointed out that because of a variety of factors, including the lack of participation from Fannie Mae and Freddie Mac, the program would be limited. But the Wall Street Journal reported Tuesday that the administration is pressuring Fannie and Freddie to do their part. Still, according to Jaret Seiberg, a research analyst at MF Global, said they "remain skeptical of the impact of this program," a sentiment echoed by Credit Suisse which called any Fannie or Freddie writedowns "symbolic." Program guidelines state that the second lien does not have to be touched as part of the writedown, so long as the combined loan-to-value ratio of both the first and second is less than 115%. Also, second-lien holders who accept a haircut receive a subsidy, while first-lien holders do not. This, according to MF Group creates little incentive for the first-lien holder to participate. "These also are performing loans, which raises the question of why the servicer would want to write down principal in the first place," Seiberg writes. But Laurie Goodman, an analyst at Amherst Securities, said the Short Refi program holds no risk to investors. The pass-throughs, or the monthly payments the servicer passes to the security holder, are guaranteed by the government. "Moreover, the loans have most likely been pulled out of the pass-throughs, so it won’t have much of an effect on speeds either," Goodman said. But Seiberg pointed out that the Federal Housing Finance Agency is supposed to be conserving the assets of Fannie and Freddie. This program appears to increase their losses. While the GOP takeover of the House may give the FHFA cover to drag its heels on entering the program, the confirmation of Joe Smith as the new FHFA director "could change the equation." Smith told a Senate committee Thursday that he pledges to address the government-sponsored enterprises' effect on local communities across the country. Write to Jon Prior.