December 2 2010 (Chris Moore)

According to JPMorgan, which tracks U.S. mortgages held by major lenders including Freddie Mac and Fannie Mae, nearly 40 percent of homeowners are still paying 6 percent or more on their mortgages.

Even with refinance rates continuing to hover at their lowest levels since Freddic Mac began tracking them in 1971, only about 16 percent of borrowers with fixed-rate mortgages enjoy rates between 4 and 5 percent.

So why haven’t homeowners taken advantage of these low rates? Because for many, the current economic conditions have made refinancing impossible. With almost 17 percent of the population unemployed or underemployed, the income needed to qualify for a new loan just isn’t available.

Many who have managed to hold on to their homes have also suffered damage to their credit scores, making refinancing more difficult and costly. In some cases, the higher interest rate they would have to pay as a cost of suffering damaged credit makes refinancing not worth it.

Then there are those whose property values have dropped to the point that they have insufficient home equity to qualify for a refinance. With over one in four homes in America underwater or having less than 5 percent equity, it’s virtually impossible to refinance unless they can put cash in to lower their principal.

And while the government has tried to address this problem by introducing the FHA Short Refinance program, which allows underwater borrowers to get principal reductions and lower refinance mortgage rates, mortgage lenders have not signed on and in September there were only 14 applications for this program.

Here’s a breakdown of what people are paying:

Source: JPMorgan

Tags: interest rates, mortgage loans, mortgage rates, mortgages, homeowners, refinance, underwater, negative equity, principal, home equity, unemployed, underemployed