The Obama administration is launching a new program to help U.S. homeowners in danger of losing their homes to foreclosure.
The $14-billion plan, announced Friday, encourages banks to reduce the amount of money homeowners owe to the bank in some cases. The program also offers help to homeowners who have home loans that are larger than the value of their houses, as well as people who are unemployed.
Some of these re-worked loans would be guaranteed against default by a government agency, the Federal Housing Administration.
Banks may agree to reduce the size of the loan because it could cost them even more money if the homeowner defaults on the loan.
Severe problems in the U.S. housing market played a major role in sparking the economic crisis. Previous efforts to help homeowners and banks work out new agreements have helped only small numbers of people who are struggling to pay back their mortgages.
Friday's announcement comes as the administration is under pressure from Congress and the public to resolve the country's foreclosure crisis.
A business group, RealtyTrac, says the number of people receiving notices that they were behind on their payments or facing foreclosure jumped 120 percent over the past two years.