President Obama's foreclosure prevention plan, which he announced Wednesday in Mesa, represents a bold and overdue effort by the federal government. It should help stabilize the nation's housing market, keep millions of families in their homes and give a lift to America's troubled economy.

The ambitiousness of the plan stands in stark contrast to the feeble efforts of the Bush Administration, which seemed more intent on helping banks than borrowers. Those who have criticized President Obama's plan fail to grasp the magnitude of the housing crisis and its central role in the country's economic tailspin.

Arizona, with one of the nation's highest foreclosure rates, should be among the states that will benefit the most.

The President's Homeowner Affordability and Stability Plan will help as many as nine million homeowners. It contains two separate initiatives. One is a refinancing program open to homeowners with loans owned or backed by Fannie Mae or Freddie Mac, the mortgage giants taken over by the government last year. This program will help borrowers refinance to lower interest loans if they have less than 20 percent equity in their home or are "under water," owing more than the home is currently worth.

The other program, designed to help homeowners with high interest loans who are at risk of losing their home. It will give lenders financial incentives to lower borrowers' monthly payments to 31 percent of their monthly income. This program will give a powerful push to lenders and loan servicers who so far have been slow to work with borrowers to avoid foreclosure.

The President's plan specifically does not help people who are investors, speculators or have borrowed recklessly. As he said, it focuses on rescuing "families who have played by the rules and acted responsibly."

Many of the plan's details are still being worked out and are scheduled to be announced March 4. Lenders will start taking applications on that date. In the meantime, borrowers are encouraged to call their mortgage servicer to learn if their loan is owned or guaranteed by Fannie Mae or Freddie Mac and to pull their financial paperwork together, including tax returns and pay records. A White House Q & A about the plan can be found by clicking this link: http://www.whitehouse.gov/blog/09/02/18/Help-for-homeowners/

One other part of the President's housing effort will require Congress to amend the U.S. Bankruptcy Code.

Bankruptcy courts currently have authority to revise the terms of almost any loan, but not the mortgage on a primary residence. Amending the law would allow bankruptcy judges to reduce a home loan's principal to bring it in line with the home's current market value. Besides providing needed relief for homeowners, the amendment would give mortgage holders a greater incentive to modify loan terms with struggling borrowers before they file for bankruptcy. I joined 21 State Attorneys General last month in a letter to Congressional leaders in support of this change.

President Obama's plan stands to benefit all of us, not just people at risk of losing their homes. Easing the foreclosure crisis will enable property values everywhere to stabilize and rebound, and it will provide the foundation for economic recovery. The President's plan is an important change of direction at the federal level. It leaves no doubt that the full authority of the federal government and very significant resources will be used to bring an end to the mortgage crisis.

Terry Goddard