President Obama says his new plan will make it easier for homeowners to qualify for mortgage re-financing, even if that loan is more than 125 percent of the value of their home.
"This is going to help a lot more homeowners refinance at lower rates," the president said Monday during a meeting with homeowners in Las Vegas.
The plan is aimed to help people like Jan Dunsmore, whose Florida home is worth $250,000 and has a mortgage of almost $300,000.
"We did try a couple of times to do things, and the runaround that we got from the bank the first time -- it was horrific," she said.
Laura Lafayette, CEO of the Richmond Association of Realtors, said she believes the program may help people in Richmond, Va.
"If this initiative could keep 2 percent, 3 percent of the foreclosures from even happening, that would have a profound effect," she said.
However, she said the national outlook is still gloomy.
"I don't think it's the kind of change that's going to have a dramatic effect on the national market and really jumpstart housing," Lafayette said.
Presidential Power Grab?
Meanwhile, the president is catching flack for bypassing Congress to put the program in motion.
Obama said he plans to issue an executive order because that's the only way to bypass gridlock on Capitol Hill.
"I've told my administration to keep looking every single day for actions we can take without Congress," he said.
Phil Kerpen, vice president for policy at Americans for Prosperity, told CBN News the move is another example of the president denying democracy to transform the country radically.
"For him to now say, 'We're going to do yet another mortgage bailout and I'm going to bypass Congress, disregard the will of the people and voters' is, I think, particularly outrageous from a process standpoint, from a question of respect for the American people," Kerpen said.
In addition, Kerpen said the plan will only put more stress on a weak economy.
"It's only going to impose more costs on the economy," he said. "It's going to reward people who can't afford to make their payments at the expense of the rest of us, and it's going to penalize investors in bond markets by reducing their return.
Kerpen said under the U.S. Constitution, the president is supposed to execute the laws, not make them.
He's urging Congress to stand up to what he calls "power grabs" by Obama.