As the current crisis continues there has not been one part of the economy hit as hard as the residential housing market. Housing values in most of the United States have dropped and a significant portion mortgage holders are fighting to keep up with monthly mortgage payments. The problem has become so commonplace that the government is deciding to support the many housing loan borrowers here at risk of losing their abodes. Professionals list two primary types of programs designed to assist mortgage holders. The two programs are home mortgage refinancing and loan modification. The two programs are designed to help individuals to reduce mortgage payments but function in slightly different manners.

Cash incentives and tax breaks will be given to banks and mortgage lenders who approve homeowners for a modification or refinance using the guidelines set by Obama in his „Making Home Affordable“ stimulus plan. Things like 20% equity in your home, which were typically required for a refinance before, are now not necessary due to mortgage lenders and banks risks being minimized, the approval rates for a refinance will be better.

The alternative solution to mortgage problems is called loan modification. Loan modification is in most ways a more straightforward alternative to loan refinancing mostly because you are altering specific aspects of the current mortgage agreement. In lieu of borrowing an entirely new mortgage with new terms you enter into an agreement with your lender to change certain features of the current agreement. For instance, if you are having a tough time making your mortgage payments due to financial catastrophe you may be able to speak to your mortgage lender and negotiate a lower mortgage payment. It is possible you should be able to do this by changing the length or other terms of the loan.

Homeowners who happen to be in immediate danger of losing their home to foreclosure, can be put on a fast track streamlined refinance program that will help them have a greater chance of saving their home, and keeping their home, by allowing them to refinance into a new fixed rate 2% mortgage. A lot of homeowners have lost significant value in their home values, some by 15% or more. These homeowners are automatically eligible to refinance their home into a new fixed rate 2% home mortgage.

The housing market will hopefully start to recover as consumer confidence increases. This mortgage stimulus plan will help millions of homeowners save hundreds of dollars every single month, and maybe more importantly their home. As stated by the Obama administration, an estimated 9 million homeowners are eligible to take advantage of this government mortgage refinance programse right now. Consider taking President Obama up on his offer and refinance your home loan today.

Learn more about Obama Mortgage Relief Plan Qualifications.