White House proposes new help for troubled mortgages. Too little, too late?

But it's also a critical issue for Obama, beyond the debate about the government's responsibility in helping struggling homeowners. Key election battleground states, including Florida and California, are awash in foreclosures and pinched homeowners, critical anchors on the economy.

The big question is whether the expanded incentives will actually spur banks to action.

Intended to reach 4 million homeowners, HAMP has only successfully helped 1 million, reducing monthly payments by an average of $500. Last week, Bank of America and Chase were both in danger of losing tens of millions of payments from Washington due to lackluster participation in HAMP. For many homeowners, too, the modification process has proved onerous, frustrating, and, at the end of the day, too much of a hassle for too little payout.

"I'm not that excited about incentives," Ira Rheingold, executive director of the National Association of Consumer Advocates, told the Huffington Post. "The fact is, the banks have done a terrible job complying with the program. Today, we're seeing the same problems as three years ago – they lose people's documents, they wrongly push people into foreclosure. And the Treasury Department hasn't held them accountable for their failures. So even if you expand the incentives, until you make the banks comply, we're going to see these problems."

Congressional Republicans tried to kill the program last year, but their effort died in the Democrat-controlled Senate. The administration, meanwhile, insists that HAMP has been effective, and expanding it over the next two years will be critical not just to struggling homeowners, but to bolster economic recovery.

“Ensuring that Americans who are struggling to make ends meet have lower payments, those out of work have more time (up to 12 months) to catch up on missed payments, and helping those who are struggling with secondary debt, like second liens, medical bills and credit cards by lifting the debt to income ratio, all the while helping to keep more Americans in their homes is an important step toward doing that,” HUD spokesman Derrick Plummer wrote to the Huffington Post.

RELATED: Home foreclosed? Top 5 ways to survive.

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