WASHINGTON (AP) – A U.S. official says President Barack Obama will announce new rules to help homeowners with little or no equity in their homes refinance their mortgages to avoid foreclosures.

The new program will apply to homeowners with federally guaranteed mortgages who are current on their payments. It cuts the cost of refinancing and removes caps for borrowers whose houses are worth less than their mortgages. Their situation is a drag on the U.S. economy.

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The president will promote the initiative during a speech Monday in Las Vegas. Obama will also use the trip to raise money for his re-election campaign.

The official spoke on the condition of anonymity to discuss the housing program ahead of the president.

Copyright 2011 The Associated Press.