Well Thought Out Plan of Attack!

Given my work history, I've been especially interested in the housing market since the crash of the sub-prime market. I started processing loans just as things started to unravel. I didn't really understand what was happening, while it was happening, but then again, I don't think too many people actually did. Including, and especially, politicians.
I try to make it a habit to at least read the front page of some of the newspapers provided for the students at the U. Today I was reading about how the government intends to resolve record breaking foreclosure rates. Obama intends to incentivize lenders and investors to refinance thier loans. Investors with mortgages higher than $729,750 are eligible for special interest rates that will save up to several hundred dollars monthly. It's estimated that 4 million people will benefit from this action. What I find ironic is that every body hates Bush because he just "spent, spent, spent" while he was in office. Yet, as much as he did, this bill that Obama is passing is much more ambitious and costly than anything Bush ever did. The difference is that Obama is essentially trying to 'twist the arms' of the lenders into revising loans. His bill also enables bankruptcy judges to modify loans at their own discretion. Here's where it get's tricky. In a market where declining house values are a very real threat, and given that houses value's are determined by the houses being sold, or that have been sold in the previous months, if a judge decides to alleviate the burden of the homeowner by changing the loan amount, he effectively decides the house is not what it was worth when the homeowner purchased the house. So that only contributes to the dangers of declining house values.