Greetings!  I just want to share this piece of information I heard on the Today show this morning with real estate guru, Barbara Corcoran.  She said President Obama's stimulus package includes a housing rescue plan to help struggling homeowners stay in their homes and stave off foreclosure.  The plan includes a loan modification or a loan refinancing program.  Loan modification is when you go to your lender, who holds your mortgage note, and ask them to restructure the terms of your loan by lowering the interest rate and/or the term of the loan to reduce your monthly payment.  Loan refinancing is simply replacing your existing loan with a cheaper loan.  The difference with the two is that with loan refinancing, you have to have equity in your home.  Loan modification does not require that you have equity in your home, because you basically owe more than your house is worth.  To qualify for a loan modification, there are 3 requirements needed:

Loan Modification Qualifications

1. Prove financial hardship
2. Mortgage payments are 31% of your gross income
3. Must be your primary residence

Advantage: No upfront fee
Disadvantage: You must have a job and prove you can make the new payment
Deadline: December 31, 2012

Loan Refinancing Qualifications

1. Must have a Fannie Mae or Freddie Mac loan
2. Loan cannot exceed 105% of your current value of your home (i.e if your home is worth $200K, you can get a loan up to $210K)
3. Must be current on mortgage payments for the last 12 months
4. Prove ability to afford the mortgage