The $75 billion foreclosure prevention plan, which the Obama administration calls the "Making Home Affordable" initiative, runs through 2012.
Here are some highlights:
• Mortgages for single-family properties that are worth more than $729,750 are excluded.
• Interest rates can be lowered to as low as 2 percent, and then, if necessary, the term of the loan can be extended to a maximum of 40 years.
• The home must be a primary residence (verified with tax return, credit report, and other documentation such as a utility bill). The home may not be investor-owned.
• The home may not be vacant or condemned.
• Borrowers must provide their most recent tax return and two pay stubs, as well as an "affidavit of financial hardship" to qualify.
• Borrowers in bankruptcy are not automatically eliminated from consideration for a modification.
• Borrowers in active litigation regarding the mortgage loan can qualify for a modification without waiving their legal rights.
• Borrowers are only allowed to have their loans modified once, and the program only applies for loans made on or before Jan. 1, 2009.
• Incentives are provided to extinguish second liens on loans modified under the program.
• Homeowners are eligible for up to $1,000 of principal reduction payments each year for up to five years.
• Separately, up to 5 million borrowers who have mortgages held by government controlled mortgage finance giants Fannie Mae and Freddie Mac should be eligible to refinance through June 2010, even if they owe more than the value of their home.
Source: Boston.com and FinancialStability.gov
Check out the U.S. Housing And Urban Development Guide To Avoiding Foreclosure