Addressing the housing issue "is a make or break moment for the middle class," Obama said. He acknowledged that earlier efforts by his administration didn't fix the problem.
"Now, I’ll be the first to admit it didn’t help as many folks as we’d hoped," he said. "But that doesn’t mean we shouldn’t keep trying."
"The housing crisis has been the single biggest drag on our recovery from the recession," he said.
Obama called on Congress to act on his latest plan, which he said was aimed at "responsible" homeowners who have continued making payments even though their homes are underwater. In other words, they owe more to the banks than their properties are worth.
Almost anyone with a credit score above 580 who has been paying their mortgage on time for past six months would qualify for refinancing at today's low rates, no matter if their note was held by Fannie Mae, Freddie Mac or a private investor, according to the proposal. Administration officials estimate it could open refinancing for up to 3.5 million new borrowers.
The estimated $5 billion-$10 billion cost of the plan would be paid for by a fee on banks, which predictably has not gone over well with the banks.
The plan also garnered mixed reaction on Capitol Hill when it was announced on Wednesday. Democratic lawmakers from California said it was "encouraging" but falls short of an aggressive response they said was needed.
Republican House speaker John Boehner of Ohio was more skeptical, saying Congress has heard similar promises from Obama on mortgage relief "at least four times... and none of these programs have worked."