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Borrowers Who Are at Risk of Foreclosure Are Asking:

1. What help is available for borrowers who are at risk of foreclosure either because

they are behind on their mortgage or are struggling to make the payments?

The Homeowner Affordability and Stability Plan offers help to borrowers who are

already behind on their mortgage payments or who are struggling to keep their loans

current. By providing mortgage lenders with financial incentives to modify existing first

mortgages, the Treasury hopes to help as many as 3 to 4 million homeowners avoid

foreclosure regardless of who owns or services the mortgage.

2. Do I need to be behind on my mortgage payments to be eligible for a modification?

No. Borrowers who are struggling to stay current on their mortgage payments may be

eligible if their income is not sufficient to continue to make their mortgage payments and

they are at risk of imminent default. This may be due to several factors, such as a loss of

income, a significant increase in expenses, or an interest rate that will reset to an

unaffordable level.

3. How do I know if I qualify for a payment reduction under the Homeowner

Affordability and Stability Plan?

In general, you may qualify for a mortgage modification if (a) you occupy your house as

your primary residence; (b) your monthly mortgage payment is greater than 31% of your

monthly gross income; and (c) your loan is not large enough to exceed current Fannie

Mae and Freddie Mac loan limits. Final eligibility will be determined by your mortgage

lender based on your financial situation and detailed guidelines that will be available on

March 4, 2009.

4. I do not live in the house that secures the mortgage I'd like to modify. Is this

mortgage eligible for the Homeowner Affordability and Stability Plan?

No. For example, if you own a house that you use as a vacation home or that you rent out

to tenants, the mortgage on that house is not eligible. If you used to live in the home but

you moved out, the mortgage is not eligible. Only the mortgage on your primary

residence is eligible. The mortgage lender will check to see if the dwelling is your

primary residence.

5. I have a mortgage on a duplex. I live in one unit and rent the other. Will I still be


Yes. Mortgages on 2, 3 and 4 unit properties are eligible as long as you live in one unit

as your primary residence.

6. I have two mortgages. Will the Homeowner Affordability and Stability Plan reduce

the payments on both?

Only the first mortgage is eligible for a modification.

7. I owe more than my house is worth. Will the Homeowner Affordability and
Stability Plan reduce what I owe?
The primary objective of the Homeowner Affordability and Stability Plan is to help
borrowers avoid foreclosure by modifying troubled loans to achieve a payment the
borrower can afford. Lenders are likely to lower payments mainly by reducing loan
interest rates. However, the program offers incentives for principal reductions and at
your lender's discretion modifications may include upfront reductions of loan principal.
8. I heard the government was providing a financial incentive to borrowers. Is that
Yes. To encourage borrowers who work hard to retain homeownership, the Homeowner
Affordability and Stability Plan provides incentive payments as a borrower makes timely
payments on the modified loan. The incentive will accrue on a monthly basis and will be
applied directly to reduce your mortgage debt. Borrowers who pay on time for five years
can have up to $5,000 applied to reduce their debt by the end of that period.
9. How much will a modification cost me?
There is no cost to borrowers for a modification under the Homeowner Affordability and
Stability Plan. If you wish to get assistance from a HUD-approved housing counseling
agency or are referred to a counselor as a condition of the modification, you will not be
charged a fee. Borrowers should beware of any organization that attempts to charge a fee
for housing counseling or modification of a delinquent loan, especially if they require a
fee in advance.
10. Is my lender required to modify my loan?
No. Mortgage lenders participate in the program on a voluntary basis and loans are
evaluated for modification on a case-by-case basis. But the government is offering
substantial incentives and it is expected that most major lenders will participate.
11. I'm already working with my lender / housing counselor on a loan workout. Can I
still be considered for the Homeowner Affordability and Stability Plan?
Ask your lender or counselor to be considered under the Homeowner Affordability and
Stability Plan.
12. How do I apply for a modification under the Homeowner Affordability and Stability
You may not need to do anything at this time. Most mortgage lenders will evaluate loans
in their portfolio to identify borrowers who may meet the eligibility criteria. After March
4 they will send letters to potentially eligible homeowners, a process that may take
several weeks. If you think you qualify for a modification and do not receive a letter
within several weeks, contact your mortgage servicer or a HUD-approved housing
counselor. Please be aware that servicers and counseling agencies are expected to receive
an extraordinary number of calls about this program.
13. What should I do in the meantime?
You should gather the information that you will need to provide to your lender on or after
March 4, when the modification program becomes available. This includes:
"¢ Information about the monthly gross income of your household including recent
pay stubs if you receive them or documentation of income you receive from other
"¢ Your most recent income tax return
"¢ Information about any second mortgage on the house
"¢ Payments on each of your credit cards if you are carrying balances from month to
month, and
"¢ Payments on other loans such as student loans and car loans.
14. My loan is scheduled for foreclosure soon. What should I do?
Contact your mortgage servicer or credit counselor. Many mortgage lenders have
expressed their intention to postpone foreclosure sales on all mortgages that may qualify
for the modification in order to allow sufficient time to evaluate the borrower's eligibility.
We support this effort.

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