Feds Streamlining Homeowner Aid

Borrowers would get help in several ways: The interest rate would be reduced so that borrowers would not pay more than 38% of their income on housing expenses. Another option is for loans to be extended from 30 years to 40 years, and for some of the principal amount to be deferred interest-free.

While lenders have beefed up their efforts to aid borrowers over the past year, their earlier efforts have not kept up with the worst housing recession in decades.

More than 4 million American homeowners, or 9% of borrowers with a mortgage were either behind on their payments or in foreclosure at the end of June, according to the most recent data from the Mortgage Bankers Association.

Indeed, Tuesday's announcement comes too late for Troy Courtney, a 44-year-old San Francisco police officer.

He moved out of his home in Mill Valley, Calif., at the start of this month -- taking his children, three dogs and one cat with him -- after failing at several to attempts to get a loan modification or a short sale -- where the lender agrees to receive less than the loan is worth.

Courtney worked overtime and tapped into his retirement account to try to catch up with two loans on his home. But in the end he couldn't convince Countrywide Financial, which managed the loan for Wells Fargo (WFC Quote), to modify the loan.

"I feel like I missed the boat," he said of the new efforts to help more homeowners. "I'm just mad at the whole system."