The program, now called Making Home Affordable Program, offers two components for troubled homeowners: one for mortgages owned by Freddie Mac and Fannie Mae and the other for mortgages that need to be modified by other mortgage lenders. The first one aims to help about 5 million homeowners through loan refinancing by June 2010 while the second one aims to help about 4 million homeowners through loan modification by December 2012.

To encourage loan modifications, the program will give cash incentives to mortgage lenders for every borrower they save from being included in foreclosure listings. It will also reward borrowers who keep up with their monthly payments for 5 years from the time their loans were modified.

In response to critics that say the program abets irresponsible borrowers, Treasury officials reiterated the program will help only borrowers threatened by foreclosure listings because of the economic downturn or by factors beyond their control. Borrowers who knowingly took out loans they could not pay are not eligible to apply for modification or restructuring.

Administration officials are also spreading the concept of shared responsibility, according to Heather Fernandez, top marketing executive at real estate business search engine Trulia. They are informing American taxpayers they need to help in reducing the number of homes in foreclosure listings to preserve the price level of their properties and ultimately stabilize the housing market and the national economy.

Peter Buchsbaum, head of Arlington Capital Mortgage Corp.'s Jenkintown branch, said the success of Obama's program will depend on the level of cooperation by the mortgage lenders. Freddie Mac and Fannie Mae said they would extend their foreclosure moratoriums while most private banks such as Wells Fargo are set to end their moratoriums in the middle of March.

The overwhelming number of applicants is also creating a problem for lenders, according to Bank of America spokesperson Rick Simon. Additionally, mortgages have been securitized into several packages and sold to different investors. This requires preparations of documents showing investors loan modification is a better option for their investments than letting the mortgages get added to foreclosure listings.