It aims to help 4 million to 5 million "responsible homeowners" to refinance and another 3 million to 4 million homeowners by lowering the risk of imminent default with a $75 billion "homeowner stability initiative" that will help to reduce their monthly payments, according to the statement.
The Obama administration's summary said the plan could offer a buffer of up to $6,000 against value declines on the average home.
The plan also aims to increase confidence in mortgage giants Fannie Mae and Freddie Mac through Treasury funding to "ensure the strength and security of the mortgage market and to help maintain mortgage affordability," the plan summary said.
"This initiative is intended to reach millions of responsible homeowners who are struggling to afford their mortgage payments because of the current recession, yet cannot sell their homes because prices have fallen so significantly," the summary said.
Keep track of what Obama has been doing since taking office:
Day 29: Stimulus Signed into Law (Feb. 17)
- Obama signed a $787 billion economic stimulus bill into law as global markets plunged on fears that the recession would deepen despite government action in many countries. (Full Story)
- Financially strapped General Motors and Chrysler raced to finish restructuring plans that must be submitted to the Obama administration by the end of the day as part of efforts to keep America's biggest carmakers afloat. (Full Story)
- Obama’s plan to reduce the flood of home foreclosures will include a mix of government inducements and new pressure on lenders to reduce monthly payments for borrowers at risk of losing their houses, according to people knowledgeable about the administration’s thinking. (Full Story)
- Obama will release his first budget proposal on Feb. 26. The administration will release an outline of the budget for the 2010 fiscal year. A more detailed version will be released later in the year. (Full Story)
Day 28: White House Wants Changes in Exec. Pay Rules (Feb. 16)
- Facing a stricter approach to limiting executive bonuses than it had favored, the Obama administration wants to revise that part of the stimulus package even after it becomes law, said White House officials. (Full Story)