So-called underwater mortgages are when borrowers owe more than their homes are worth. Feinstein has authored one of three bills to help homeowners refinance at the current lower home mortgage rates.
"There are 1.1 million homeowners who are eligible for this program in California and we believe 800,000 of them are in Southern California," Feinstein said.
The Feinstein bill would let homeowners refinance who are current on their mortgages, their loan doesn't exceed 140 percent of the value and they meet a minimum credit score on their principal residence.
"Ninety percent of underwater homeowners are current on their loan and are locked out through no fault in their own from benefiting from the lowest interest rates on a 30-year loan in the history of the country," Donovan said.
The legislation would be financed through a 0.1 percent increase on fees paid by mortgage lenders.
"This does not impact the deficit and the debt, and so all the folks who talk about cutting and just want to focus on eviscerating the safety net, there is really no reason not to be for this," Villaraigosa said.
Feinstein's bill was only recently introduced in the Senate. It's too early to assess how much support the bill will or will not get.