The recession has brought about devastating consequences to homeowners throughout the country. Many responsible individuals who consistently make their monthly mortgage payments have seen their property values fall and are unable to refinance at lower mortgage rates. Other homeowners have lost jobs and are fighting to continue to make their mortgage payments on time, while still others are facing foreclosure. In response to this outbreak of foreclosures, President Obama introduced government foreclosure help last February in the form of the Homeowner Affordability and Stability Plan.

Last March, President Obama announced refinements to this government program to stop foreclosure entitled the Making Home Affordable Program. The program has two components, the Home Affordable Refinance Program (HARP) and the Home Affordable Modification Program (HAMP). Under these Obama help plans, millions of families have already refinanced or modified their mortgages to avoid foreclosure.

Some of the details of Obama’s foreclosure relief plan include:

• Eligible borrowers who are current on their mortgage payments but could not take advantage of lower interest rates because their homes have dropped in value may now have an opportunity to refinance under HARP. You can call your mortgage lender to find out whether your loan is owned or has been guaranteed by Fannie Mae or Freddie Mac (Government Sponsored Enterprises or GSEs).
• Owners who owe more than their property is worth qualify for a refinance under HARP if their first lien mortgage does not go over 125 percent of the current market value of the property. So, if your home is worth $200,000 but you owe $250,000 or less on your first lien mortgage you may qualify, and you should see a resulting reduction in your mortgage payments.
• For servicers of loans owned or guaranteed by Fannie Mae or Freddie Mac, participation in HAMP is required. Your loan servicer is the financial institution that collects your mortgage payments and manages your loan. Your servicer may also be your lender, but often loans are owned by groups of investors who hire servicers to interact with borrowers. Substantial incentives are available to lenders and borrowers who complete modifications under HAMP. The Treasury is providing incentives to servicers to lower the interest rates to as low as two percent.
• If you have been delinquent on your mortgage by more than 30 days during the last 12 months you do not qualify for refinancing under HARP. The program expires on June 10, 2010. You have until December 31, 2012 to enter into a HAMP trial modification.
• Even if you cannot make three payments by the end of a trial period established by your lender, and you are not eligible for a modification under HAMP, you still may qualify for other foreclosure prevention options provided by your servicer.
• You may receive free foreclosure counseling and assistance from a HUD –approved housing counseling agency.
• If your loan is already scheduled for foreclosure, participating servicers may not go ahead with a foreclosure sale until you have been evaluated for a modification under HAMP. If you are eligible, you must be offered a trial modification.