The government has approved billions of dollars of aid to programs as broad as “renewable energy” and as focussed as bailing out the insurance giant AIG.  Just this week the details of the administrations plans for helping the millions of at risk homeowners.  The help is coming in the form of two initiatives: refinancing and loan modification.  I won’t go through the details of each but will touch upon the program highlights and point you toward some good resources on the web.

Refinancing Initiative:

You may be eligible if:

  • You own and currently occupy at one to four-unit home.
  • Your mortgage is held by Fannie Mae or Freddie Mac.  To check click here.
  • The amount you owe currently cannot exceed 105% of the current value.
  • You must have stable income sufficient enough to support the new mortgage payments.
  • If you would like to participate you can call the lender of your choice – you do not need to work with your current loan company and there are no “approved providers”, so don’t get scammed.

The refinance initiative is not designed for:

  • Homeowners who are delinquent on their mortgage payments.
  • Homeowners who owe more than 105% of their homes current value.
  • People who want to get cash back from their refinance.

Loan Modification Program:


  • Owner occupied homes only – no vacant homes – no investor homes.
  • Current balance of loans must be equal to or less than $729,750 for a single family home.
  • Borrower must be screened for hardship.  Your assets and income will be checked.

Loan modification is designed to help homeowners who are in trouble.  The goal is to avoid foreclosure by providing incentives and a framework for mortgage companies to re-write loans instead of foreclosing on them.  The government participates by matching mortgage company incentives and providing payments to those companies who participate in the program.  Borrowers who are successful in the program are also rewarded overtime.

For more details on this program look at the following links:

Treasury Dept. Loan Modification Press Release

Freddie Mac – Avoid Foreclosure

Homeowner Stability Act Question and Answer

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