Written by Nikki Smith | 08 March 2010

Borrowers are missing out on billions of dollars in savings because high rates of negative equity, tighter lending standards and falling incomes have made it difficult for many to refinance.

Federal officials are investigating ways to help refinancing borrowers, and last week the White House announced it will extend its Home Affordable Refinance Program.

Current refinance volume is nowhere near as much as expected, experts say, considering interest rates continue to hover at historic lows. Last week the Mortgage Bankers Association reported the average rate on a 30-year fixed mortgage was 4.95%.

The last time mortgage rates were at current levels was 2003, when refinancing activity hit $2.9 trillion, according to trade publication Inside Mortgage Finance. Last year refinance volume reached $1.2 trillion, the highest amount since 2003.

The Wall Street Journal examines why last January's refinance applications were at their lowest levels in a year.