President Barack Obama's $75 billion mortgage rescue plan is designed to help both families facing foreclosure and folks having trouble keeping up with their mortgage payments.
Keith T. Gumbinger, senior vice president of HSH Associates in New Jersey (www.hsh.com), is an expert in mortgage trends and a contributor to a consumer resource of mine called Bottom Line Secrets. Gumbinger says you can break the President's plan down to two parts:
* "LOW-COST" REFINANCING. Gumbinger says this part will be for homeowners who can't qualify for a new loan because their homes have lost so much value. To qualify for this program, you'll have to owe up to 105 percent of your home's worth. You will have to calculate what equity you have in your home to figure that out.
* LOAN MODIFICATION. Only your current lender can assist you with this one. In fact, I've reported about loan modifications on a previous Ask Andy:
This program involves getting your lender to change the terms of your existing loan, like your interest rate, length of loan, etc. Gumbinger says you will have to prove that you spend more than 31 percent of your gross monthly income on mortgage payments.
Consult your current lender first about these options or a HUD-certified housing counselor. You can find a counselor by contacting the Memphis Housing Counseling Network: http://memphis.earnbenefits.org/page.php?pageID=607 or the Memphis Fair Housing Center at 901-432-HOME (4663).