Barack Obama announced in Mesa, Ariz., today a three-pronged plan to revamp the mortgage market, the Wall Street Journal reports. The plan offers opportunities for 9 million homeowners to refinance or rework their mortgages. Five million borrowers facing foreclosure will have access to a $75 billion fund, and another 4 million with negative equity will be aided though as much as $200 billion in new commitments to Fannie Mae and Freddy Mac. A third element aims to reduce mortgage rates.
“All of us are paying a price for this home mortgage crisis,” Obama said. “When the housing market collapsed, so did the availability of credit.” The plan is more ambitious and expensive than originally anticipated, and while the total cost isn’t clear, the Journal estimates it could top $275 billion. The plan will also lean on companies receiving TARP funds, who’ll be required to modify certain loans. The administration promises that the plan will help only “hard pressed homeowners,” and not speculators.