SACRAMENTO, Calif.—California is imposing a 90-day moratorium on housing foreclosures under a new law that takes effect Monday.

The law is expected to make lenders try harder to keep borrowers in their homes. Loan companies must prove they tried to modify the delinquent loans before they can begin foreclosing.

But supporters acknowledge the California Foreclosure Prevention Act won’t stop thousands of foreclosures from eventually happening. There have been more than 365,000 foreclosures in California since early 2007, with many more already scheduled.

The bill passed in February is similar to the Obama administration’s Making Home Affordable Program that began in March.

Both encourages lenders to cut interest rates or rewrite loans to affordable levels.

WASHINGTON (AP) — Housing Secretary Shaun Donovan said Thursday it’s critically important that banks and lending institutions “step up to the plate” to help make certain the Obama administration’s new home foreclosure initiative succeeds.

“This started as a mortgage crisis but it’s become a jobs crisis,” said Donovan, speaking a day after President Barack Obama announced a $75 billion program aimed at a problem many analysts say has been at the heart of the country’s economic tailspin.

In addition to the new mortgage lifeline for millions of Americans on the brink of foreclosure, the administration on Wednesday announced an additional $200 billion in government assistance to mortgage giants Fannie Mae and Freddie Mac, the largest makers of home mortgages in America.

It’s all part of a stepped-up effort to encourage lending institutions to refinance homes for millions of homeowners considered to be “under water” — properties held by people whose mortgage payments exceed the value of their homes in the depressed housing market.

Interviewed Thursday on NBC’s “Today” show, Donovan said the administration feels certain there are sufficient requirements to ensure heavy bank refinancing, saying that could “tip the balance for millions of homeowners.”

Sheila Bair, chairman of the Federal Deposit Insurance Company, said: “There will still be some borrowers who lose their homes to foreclosure. Some of that will be inevitable. But this should have a significant reduction in the foreclosure rate, bringing it more in line with historical levels.”

Bair, who appeared on ABC’s “Good Morning America,” said that as a person making regular mortgage payments herself, she understands the resentment of homeowners with safe loans who feel others are being rewarded for risky behavior. She said, however, that the plan would help many, but not all, and that’s appropriate at a time of plunging home prices.

“Is it fair to everyone? Perhaps not,” she said. “But I think frankly we’re beyond that.”

Bair refused to predict when home prices might stabilize, but said she hoped the loan modifications beginning in March would temper the ongoing declines.

Donovan said mortgage refinancings under one key part of the program would be available only to people with good credit.

But he also said that “there are clearly a number of homeowners around the country who won’t benefit and shouldn’t benefit,” saying he was referring in part to “investor owners” — people who bought properties they never occupied.

By Amy Hoak, MarketWatch

"Soon my Treasury Secretary, Tim Geithner, will announce a new strategy for reviving our financial system that gets credit flowing to businesses and families," President Obama said. "We’ll help lower mortgage costs and extend loans to small businesses so they can create jobs. We’ll ensure that CEOs are not draining funds that should be advancing our recovery.

"And we will insist on unprecedented transparency, rigorous oversight, and clear accountability — so taxpayers know how their money is being spent and whether it is achieving results." Read the full address.

While the financial rescue plan passed by Congress last year helped avoid a financial collapse, Obama said that "too often taxpayer dollars have been spent without transparency or accountability." He also charged that while banks have received help, others who need loans — homeowners, students and small businesses — have had to fend on their own.

This week, the House of Representatives passed the American Recovery and Reinvestment Plan, a stimulus that includes a combination of tax cuts for families and investments in energy dependence and infrastructure. Obama said the stimulus will save or create more than 3 million jobs over the next few years, and urged the Senate to also pass the plan. See full story.

Obama noted that the economic slowdown has already cost the country tens of thousands of jobs in January. "And the picture is likely to get worse before it gets better," he said.

In his address, Obama said that no one bill can cure the economy’s problems. As jobs are created, it is also necessary to make sure the markets are stable, credit is flowing and families can keep their homes, he said.