The administration announced it would provide $3 billion to help unemployed homeowners avoid foreclosure.

Despite the administration's efforts to reduce the number of foreclosures, nearly 3 million homeowners experienced a foreclosure filing last year, "setting a new record for the number of people falling behind on their mortgage payments," reports CNNMoney.com.

On a brighter note, HUD announced $2 billion in Recovery Act funds to help revitalize communities. Part of the money will be used to protect homeowners by "requiring agencies to ensure that new homebuyers" under the Neighborhood Stabilization Program will receive a mortgage from a lender who complies with fair lending practices, HUD says.

"The Obama administration’s $75 billion program to protect homeowners from foreclosure has been widely pronounced a disappointment, and some economists and real estate experts now contend it has done more harm than good," the New York Times reports.

"Critics increasingly argue that the program, Making Home Affordable, has raised false hopes among people who simply cannot afford their homes."

The omnibus spending bill signed today by Obama grants the Department of Housing and Urban Development funds to provide counseling for families at risk of losing their homes, information and assistance to those who want to avoid foreclosure and pre-purchase and foreclosure counseling to potential homebuyers.

According to a recent Treasury report, roughly 4 percent of homeowners have received permanent help under the Making Home Affordable loan modification program. The program was established under the administration's Homeowner Affordability and Stability Plan.

The Department of Housing and Urban Development will allow homeowners who are "current, but up to 125 percent underwater on their mortgage" to participate in the administration's Home Affordable Refinance Program, according to a HUD press release.

The program was established under the Homeowner Affordability and Stability Plan earlier this year. Prior to the change, only borrowers whose first mortgage was not more than 105 percent of the property's current market value were eligible.

The Obama administration announced the start of the Homeowner Affordability and Stability Plan as the Treasury Department released the program's guidelines. Although a specific fund to help people refinance their mortgages has yet to be created, the plan, which takes effect immediately, is designed to help make mortgage payments more affordable.

Speaking in Mesa, Ariz., President Obama said that his $75 billion Homeowner Affordability and Stability Plan [PDF] would allow 4 million to 5 million homeowners with Fannie Mae and Freddy Mac mortgages to refinance their loans at lower rates.

The plan also includes incentives for lenders to work with borrowers of subprime loans, which have been a major factor in the foreclosure crisis. If the lender offers rates that the borrower can afford, the government will pay the lender part of the difference between the old and new payments.