Even home owners who are making monthly payments are challenged in this economy. Since 28% of homes are "under water" value wise, many homeowners, even those with good credit & who are struggling to make payments are unable to refinance. Resetting Residential loans across the board will ease all Americans monthly payments, freeing up expendable income to be re-invested into the economy. The bank still makes money on interest, and the home owner is breathing easier & able to spend more to spur the economy.
This may not help home owners "under water" regain their loss, but can help them maintain the American Dream til the economy and the housing market turns around. We need to stabilize the housing market. If people can afford their payments, then more Americans can keep a roof over head.