President Barack Obama's plan to tackle the US housing crisis is aiming to help up to nine million families.
President Barack Obama has revealed a long-awaited plan to tackle the US housing crisis, aiming to help up to nine million families.
The plan will aim to provide refinancing to four to five million "responsible homeowners".
The plan will provide refinancing to four to five million "responsible homeowners" on the verge of defaulting.
A $75bn (£53bn) "homeowner stability initiative" will also aim to help reduce monthly payments for a further three to four million people.
It also aims to help reduce monthly payments for a further three to four million people, to no more than 31% of their income.
President Obama is due to reveal the plan in full when he gives a speech at a high school in Arizona later.
President Obama unveiled the details in a speech at an Arizona high school.
The $75bn plan is more ambitious than expected. A summary was released by the Obama administration ahead of the speech.
President Obama stressed that the plan would not help lenders or borrowers who had acted irresponsibly.
The announcement came one day after President Obama signed into law a $787bn (£548bn) economic stimulus package.
Help for homeowners
Help for homeowners
Falling house prices have been at the heart of the problems in the financial sector.
Falling house prices have been at the heart of the problems in the financial sector.
More than one million people in the US have lost their homes in the housing crisis.
More than one million people in the US have lost their homes in the housing crisis, and President Obama said a further six million homes were at risk of foreclosure.
The plan is designed to assist homeowners who owe more on their mortgages than their homes are now worth, as well as those on the verge of foreclosure.
The plan is designed to assist "underwater" homeowners - those who owe more on their mortgages than their homes are now worth, as well as those on the verge of foreclosure.
The summary said it could provide a buffer of up to $6,000 against declining values on the average home.
President Obama said it could provide a buffer of up to $6,000 against declining values on the average home.
The plan also aims to increase confidence in mortgage giants Fannie Mae and Freddie Mac, which underwrite more than half of all US mortgages, by providing a further $200bn in Treasury funding.
He also revealed a further $200bn in Treasury funding to mortgage giants Fannie Mae and Freddie Mac, which underwrite more than half of all US mortgages.
Mixed reception
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"The plan is good, but it is unnecessarily complicated," said Michael Cheah from AIG SunAmerica Asset Management.
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"I think it should come with side effects, like people trying to game the system. The Fed should just go ahead and expand the purchases of mortgage-backed securities."
However, others were more optimistic. Lawrence White, economics professor at New York University Stern Business School, said he thought that tackling the foreclosure problem was a good start.
"I think the combination of the stimulus package and the efforts at dealing with foreclosures will mean that maybe by the fall we see a bottoming out of housing prices," he said.
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