President Obama unveiled today a $75 billion "foreclosure fix" that provides financial incentives to lenders to help home-owners meet their mortgage payments in the face of declining home prices.

The proposal, unveiled in a speech in Mesa, Arizona, "marks a sharp departure from the Bush administration, which relied mainly on having servicers voluntarily modify troubled mortgages," according to an article today by Tami Luhby, CNNMoney.com senior writer.

"Obama, on the other hand," the article continued, "will make it easier homeowners to afford their monthly payments either by refinancing the mortgages or having their loans modified. The president is vastly broadening the scope of the government rescue by focusing on homeowners who are still current in their payments but at risk of default. And he puts billions of federal funds into enticing servicers to modify the loans of those who've already stopped paying. While still voluntary, the program contains a mix of carrots and sticks for mortgage servicers and investors, both of whom have been seen as resistant to modifying loans. The program would not only give servicers $1,000 for each modification, but would give them another $1,000 a year for three years if the borrower stays current. It will also give $500 to servicers and $1,500 to mortgage holders if they modify at-risk loans before the borrower falls behind. But the administration is also wielding a big stick. It will work with Congress to amend bankruptcy laws to allow judges to modify mortgages, a step community advocates say is badly needed but that the financial industry abhors."

According to the article, "The administration, which is marketing its plan as help for 'responsible homeowners,' estimates it can help up to 5 million people. The plan would help borrowers who owe more than 80% of their home's value to refinance and reduce their monthly payments. Lenders generally won't refinance people who have less than 20% equity in their homes. But only those who are current on their payments and whose loans are held or guaranteed by Fannie Mae and Freddie Mac are eligible. Also, the new mortgage, including refinancing costs, can't exceed 105% of the current market value of the property, excluding many of the hardest hit. So if your mortgage is $210,000, your property can't be worth less than $200,000. The program, which begins March 4, allows borrowers to refinance into 15-year or 30-year fixed-rate mortgages at the current market rate, which hovers around 5%. This could benefit those whose mortgages carry higher rates or those in adjustable-rate or interest-only loans, groups of people who could see big rate spikes in the future. The plan, however, will not reduce the loan balance."

The administration, the article said, "is also creating a $75 billion initiative to reduce monthly payments for at-risk borrowers by subsidizing interest rates. The goal would be to bring payments to no more than 31% of a borrower's income. It estimates this program, dubbed the Homeowner Stability Initiative, would help up to 4 million people."

The article quoted President Obama as stating that the plan "will not rescue the unscrupulous or irresponsible by throwing good taxpayer money after bad loans."

The proposal would help borrowers, both those who are current and those who are delinquent, who live in their homes lower their monthly payments for five years by having the servicer reduce interest rates so that the monthly obligation is no more than 38% of a borrower's income and then having the government "kick in money to bring payments down to 31% of the homeowner's income," the article said.

Under the Obama proposal, judges will be able to modify mortgages.

Moody's Economy.com recently reported that almost 27 percent of homeowners in the United States owe more on their mortgages than what their houses are worth now.