A sign is displayed in front of a foreclosed home in Bridgeport, Conn.
A sign is displayed in front of a foreclosed home in Bridgeport, Conn. - 
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KAI RYSSDAL: The housing news this week, as I think we've mentioned, has been troubling. Sales of both new and used homes continue to be tepid. Prices are still going down. The Obama administration has offered a couple of versions of its mortgage assistance program. But still, just 200,000 homeowners -- out of millions who're at risk of foreclosure -- have gotten relief.

So today, the Treasury Department announced another $50 billion try at doing something. Lenders are going to be required to help people who have lost their jobs hold onto their homes. And, for the first time, banks are going to get incentives to reduce the principal amount due on homes that are underwater. That, by the way, is now one in every five homeowners in America.

Marketplace's Mitchell Hartman has our story.

Mitchell Hartman: Earlier mortgage relief efforts tried to help victims of sketchy lending who were defaulting left and right. Now, says Nicolas Retsinas of Harvard University, the effort has shifted to victims of the economy itself.

Nicolas Restinas: I've lost my job or I've had a problem with health care. Those problems in the prime mortgage market now are much more significant.

People who have been laid off will be able to temporarily lower their mortgage payment to a third of their monthly income -- usually their unemployment check. But there's a bigger problem looming, says Retsinas.

Retsinas: People are underwater, they owe much more than the home is worth. And that's added a whole new lexicon, the language of "strategic defaults." Why should I pay if I owe more than the house is worth?

Michael Russell is so underwater on his house outside Minneapolis, he could use scuba gear. He's already tried to get the bank to lower his mortgage payments. Now, he's trying to sell, hoping the bank will take $50,000 less than he owes. I told him the new federal program to reduce his principal might actually help him hold on to his home.

Michael Russell: I'm just not sure how many hoops I have to jump through in order to actually get approved and how long it's going to take.

Nicolas Retsinas says if a lot of people do jump through those hoops and get to write down their principal, the administration could pay a different price.

Retsinas: Political push back: The person next door saying, "Well, I played by the rules, I paid my mortgage, why can't I get some relief in what I owe?"

The Treasury Department says the new program isn't for second homes or those bought by speculators. It's aimed at "responsible homeowners affected by the economic crisis through no fault of their own."

I'm Mitchell Hartman for Marketplace.

Follow Mitchell Hartman at @entrepreneurguy