Obama's Mortgage Refinance Proposal

Obama is currently floating a mortgage refinance proposal. Here is a simple question: why aren't people refinancing their mortgages right now? Presumably there are cost to doing the refinancing that exceeds the benefits. In this proposal, who is going to eat those costs? The taxpayers? The mortgage lenders? From Fox News:

Sources in the housing and mortgage industry confirm that the refinancing proposal, which would cover government-backed mortgages, is one of several on the table as the administration tries to tackle the housing slump as well as the overall slack in the economy.
"As one would expect, we continue to look for ways to ease the burden on struggling homeowners and to help stabilize the market, whether that's through assessing new proposals or older ones worth re-considering as market conditions change," an administration official told Fox Business Network, while cautioning they have "no plans to announce any major new initiatives at this time."
The refinancing idea would help homeowners by saving them money on interest payments while potentially having a stimulus effect on the economy -- since the money they would have spent on mortgage interest would be available for other things.
Christopher Mayer, a professor of real estate finance and economics at Columbia University who pushed the idea, estimated it could save consumers $75 billion a year in interest. . . .

Here is another article indicating that the plan might be aimed at subsidizing "high risk borrowers."