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Obama plan to lower mortgage payments could help, but how much?

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"The truth is, it’s going to take more time than any of us would like for the housing market to fully recover from this crisis," Obama said as he unveiled details of new initiatives. "I’ll be honest – the programs that we put forward [so far] haven’t worked at the scale that we hoped."

He said his administration's efforts have helped nearly 1 million people refinance in the past two years. But the scale of the problem is massive.
 
The nation now has about 30 million mortgages backed by government-sponsored enterprises (GSEs), mainly Fannie or Freddie, Newport says. About 3 million of those are "under water," meaning the loan is now bigger than home value. Another 20 million or more have been underwritten entirely by private lenders. Some 35 percent of those, 7 million or more, are under water.

Obama's argument is that as more families refinance at a low interest rate, incidences of default and foreclosure will diminish, helping to stabilize home values and restore consumer confidence. The families who benefit will also get extra cash in their pockets each month, which they can use to buy other things in the economy or to pay down debt.

The president's latest plan includes several major elements:

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