"Four years ago this month, a crisis that started out on Wall Street almost brought down our entire economy," Obama said in his weekly radio and Internet address. "The nation's biggest banks were days away from failing. The stock market -- and millions of American retirement accounts -- were in free-fall. Credit froze. Lending stopped. And businesses large and small didn't even know if they'd be able to make payroll.
"Today, we know the biggest cause of that crisis was reckless behavior in the housing market," Obama said.
He said millions of Americans who "did the right and responsible thing … were badly hurt by the irresponsible actions of others," including speculators looking to make a quick buck and banks that packaged and sold risky mortgages for "phony profits."
The middle class was left "holding the bag" when the bubble burst, and it pushed the entire economy into a historic recession, Obama said.
"Four years later, the housing market is healing. Home sales and construction are up. Prices are beginning to rise. And more than a million families who began this year owing more on their mortgages than their homes are worth, are now back above water.
"We're moving in the right direction. But we're not there yet. There are still millions of Americans who are struggling with their mortgages, even at a time of historically low rates."
Obama said his administration has worked with state attorneys general to "investigate the terrible way many homeowners were treated" and secured a settlement from the country's biggest banks to help families keep their homes.
He said hundreds of thousands of Americans who were stuck in high-interest loans already have been able to take advantage of lower rates and save thousands each year.
"When folks are spending less on mortgage payments, they're spending more at local businesses. And when those businesses have more customers, they start hiring more workers," he said, adding even more can be done if Congress acts when members return to Washington in November.
"Back in February I sent Congress a plan to give every responsible homeowner the chance to save about $3,000 a year on their mortgages by refinancing at lower rates. It's a plan that has the support of independent, nonpartisan economists and leaders across the housing industry. But Republicans in Congress worked to keep it from even getting to a vote. And here we are -- seven months later -- still waiting on Congress to act.
"This makes no sense. Last week, mortgage rates were at historic lows. But instead of helping more and more hardworking families take advantage of those rates, Congress was away on break. Instead of worrying about you, they'd already gone home to worry about their campaigns."
Obama said it's going to take a while longer for the housing market to fully recover, but it will take much longer and cause more pain for the middle class if Congress fails to act.
"If you agree with me, I hope you'll make your voices heard. Call your Representative. Send them an email. Show up at their town hall and tell them that when Congress comes back to Washington, they better come back ready to work. All of you are doing everything you can to meet your responsibilities. It's time Congress did the same," Obama said.