Obama unveils $275bn housing recovery plan

Barack Obama unveils $275 billion scheme to solve problems of US housing market.

Obama has unveiled his much-vaunted blueprint for getting the United States' property market back on its feet.

Up to five million 'responsible' homeowners on the brink of defaulting will be refinanced, while a further four million will have their monthly payments reduced under the $275 billion (£191 billion) scheme.

Unveiling the plan at a school in Phoenix, Arizona, the president insisted it would help everyone in the States.

"In the end, all of us are paying a price for this home mortgage crisis. And all of us will pay an even steeper price if we allow this crisis to continue to deepen," he said.

"But if we act boldly and swiftly to arrest this downward spiral, every American will benefit."

The key elements of the homeowner affordability and stability plan:

• Refinancing help for four to five million homeowners who receive their mortgages through Fannie Mae or Freddie Mac



• New incentives for lenders to modify the terms of sub-prime loans at risk of default and foreclosure



• Steps to keep mortgage rates low for millions of middle class families looking to secure new mortgages



• Additional reforms designed to help families stay in their homes

"The plan I'm announcing focuses on rescuing families who have played by the rules and acted responsibly by refinancing loans for millions of families in traditional mortgages who are underwater or close to it; by modifying loans for families stuck in sub-prime mortgages they can't afford as a result of skyrocketing interest rates or personal misfortune; and by taking broader steps to keep mortgage rates low so that families can secure loans with affordable monthly payments," President Obama added.