This week details on President Obama's Homeowner Affordability and Stability Plan will be released.  This is the program designed to help homeowners who are having trouble making payments prevent foreclosure and refinance their  loans.  Below is a brief summary describing the program:

Eligible borrowers who are current on their mortgage but can't refinance because of declining home values may be able to refinance into a 15 or 30 year fixed rate loan.  The loan must not exceed 105% of the current market value of the property.

The refinancing will not reduce the amount you owe on the mortgage.  The purpose of the Homewoner Affordability and Stability Plan is to help borrowers refinance into a more affordable fixed rate loan.  Reducing the interest rate should save the homeowner money by reducing the amount of interest owed.

Mortgage lenders will begin accepting applications after details are announced on March 4.  In the meantime, collect the information you will need to provide to your lender:  current pay stubs, most recent tax return, second mortgage information (f any), credit card balances and balances on any other loans, like student loans or car loans.

If you have two mortgages, this modification plan is only eligible for the first mortgage.

There are NO FEES to modify your loan under this plan.  Beware of any organization that attempts to charge a fee for housing counseling or loan modification, especially if they ask for a payment in advance.

To apply for this program, wait until after March 4 and contact your lender.  The lender will tell you if you are eligible.  Note that banks and housing counselors will be receiving a large amount of phone calls regarding this program, and it may take several weeks to get an answer or confirm eligibility.

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