WASHINGTON -- President Barack Obama defended his administration's beleaguered foreclosure-prevention initiatives on Wednesday by arguing that more aggressive steps to assist homeowners might help people who don't deserve to be helped.

Asked if his administration had done enough to stem the foreclosure crisis, Obama opted not to address the foreclosure fraud scandal that has forced banks to temporarily halt home repossessions across the country. Instead, he claimed that the government's efforts had stabilized the housing market, and argued that the "biggest challenge" was to make sure speculators and deadbeats didn't take advantage of the government's help.

"The biggest challenge is how do you make sure that you are helping those who really deserve help and if they get some temporary help can get back on their feet, make their payments and move forward and stay in their home versus either people who are speculators, own second homes that they really couldn't afford because they'd gotten a subprime loan, and people who through no fault of their own just can't afford their house anymore because of the change in housing values or their incomes don't support it," Obama said during a roundtable discussion with a handful of progressive bloggers at the White House.

"And we're always trying to find that sweet spot to use as much of the money that we have available to us to help those who can be helped, without wasting that money on folks who don't deserve help," he continued. "And that's a tough balance to strike."

Homeowner advocates, members of Congress, and auditors of the administration's Home Affordable Modification Program have relentlessly criticized the Treasury Department for the program's shortcomings. President Obama said in early 2009 when he announced HAMP that it would help "as many as three to four million homeowners to modify the terms of their mortgages to avoid foreclosure."

While 640,300 homeowners are benefiting from reduced payments under HAMP, 728,686 people have been bounced from the program. Fewer than 500,000 are in active "permanent" five-year modifications. There is no shortage of stories from homeowners who say banks acted in bad faith by stretching out "trial" modifications that are supposed to last for only three months, then denying permanent modifications and leaving homeowners faced with imminent foreclosure -- and no shortage of class action lawsuits, either. (Though there has been only one street protest by frustrated homeowners.)

On Monday, a federal bailout watchdog reported that HAMP sometimes actually causes the foreclosures it's designed to prevent, as applicants "end up unnecessarily depleting their dwindling savings in an ultimately futile effort to obtain the sustainable relief promised by the program guidelines." It's an allegation that had already been made by homeowner advocates.

Obama is unfazed by all of that.

"The HAMP program has gotten a lot of criticism, but the fact of the matter is, is that you've got half a million people who have gone through permanent loan modifications that are saving 500 bucks a month," Obama said. "And I get letters every day from people whose homes were saved as a consequence of it."

Obama and other officials in his administration have ditched the three to four million number and now insist that the purpose of HAMP was to help the broader housing market and give doomed homeowners a softer landing when they are booted from their homes. Even HAMP borrowers in trial periods who are ultimately bounced from their homes, the administration argues, benefit from reduced monthly payments, which are typically $500 less than their normal amount.

One of the biggest changes to HAMP since it started last year has been the requirement that as of June, borrowers must prove their eligibility with documents like tax forms and pay stubs. The administration argues that many people were denied permanent modifications because they were put into trial plans before their ability to pay had been verified.

Obama pointed out that what's driving foreclosures nowadays is the jobs crisis, rather than predatory lending and exploding mortgages. "And so the single most important thing I can do for the housing market is actually improve economic growth as a whole," he said. "If we can get the economy moving stronger, if we can drive the unemployment rate down, that will have probably the biggest impact on foreclosures, as well as housing prices, as just about anything. "