Bank of America says it’s begun refinancing mortgages under the Obama administration’s "Making Home Affordable" initiative, which is designed to allow homeowners with loans owned by Fannie Mae or Freddie Mac to take advantage of lower rates.

Homeowners who are current on their mortgages are eligible to refinance under the program even if their loan-to-value (LTV) ratio has ballooned to as much as 105 percent because of falling property values.

There’s no minimum credit score for "Home Affordable" refinancings, and private mortgage insurance (PMI) is not required to refinance loans if insurance was not required on the original loan (Fannie and Freddie generally require buyers putting down less than 20 percent to purchase PMI).

Borrowers refinancing a loan with PMI will not be required to buy additional coverage, even if they now have a higher LTV (see story).

Bank of America said it’s been contacted by 200,000 homeowners since the Home Affordable program was announced. In a first wave of refinancings, Bank of America said it will first serve homeowners whose mortgages are serviced by Bank of America or Countrywide, and who do not have mortgage insurance on their current loans.

Other borrowers will be served "as systems become operational," the company said in a press release.

Bank of America, which completed its acquisition of Countrywide Financial this year, will combine the companies’ mortgage brands as Bank of America Home Loans on April 27.

Wells Fargo & Co. reported "exceptionally strong mortgage banking results" Thursday, saying it originated more more than 450,000 loans totalling upward of $100 billion during the first quarter.

The San Francisco-based bank said it received 800,000 mortgage applications for $190 billion in loans, up 64 percent from the fourth quarter, with $100 billion in applications in the pipeline at the end of the quarter.

The strength in mortgage lending helped Wells Fargo boost projected net income for the quarter to a record $3 billion, news that sent stocks in the financial sector soaring Thursday.

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