The Obama administration has put forth a plan that includes $75 Billion to help homeowners restructure their loans and an additional $400 Billion to shore up Fannie Mae and Freddie Mac in an attempt to correct the suffering economy.

In an attempt to stem the tide of foreclosures, the goal is to help people refinance so that their home payments do not exceed 31% of the homeowner’s income.

“You’ll start to see the effects quite quickly,” Treasury Secretary Timothy Geithner told reporters in Phoenix, noting that rules governing the changes will be published March 4.

Wall Street appears doubtful. I’m not sure that should be the thing that matters most.

Bottom line. He’s trying to keep rates low for the middle class. For homeowners that want to keep their home even if they are worth less than the loan value, he’s trying to encourage lenders to step up and work together to modify their loans. As an average citizen I have no control or say over what happens here, so I can only hope for the best and hope that it doesn’t simply prolong our pain (ref. to Japan’s lost decade).

Obama said:

But, he said, it will do nothing to help “the unscrupulous or irresponsible.” He cited so-called speculators who took out risky loans on multiple properties to make money by selling them during the housing boom, lenders who took advantage of naive buyers by glossing over the fine print, and people who willingly bought homes that were way beyond their means.

Great!