President's stimulus plan

Will the President's stimulus plan help you?

From reading about yesterdays announcements it appears there are two types of people they are trying to help. If you fit into one of these two groups the stimulus plan may help. 

As I understand the Presidents program the two parts of the program are:  1 -- loan modification and  2 -- loan refinancing. 

As I understand what has been proposed the loan modification is aimed at folks that are in deep mortgage financial trouble. Their monthly mortgage payment far exceeds 31 percent of their pre-tax monthly income. This program is to provide government subsidies and incentives to financial institutions so they can cut their interest rate and possibly lower their principal, and  stretch out the mortgage to bring the monthly payment down to 31 percent of their pre-tax income. This sounds good. My questions are: Will the Mortgage Financial Institutions agree to this and then actually do it. And then will there be some oversight to make sure the Mortgage industry follows the new rules?

The other group that is about to be helped are all of us who are going under water -- We are already slowly drowning.  This group of homeowners are current on their payment. Their monthly payment is 31 percent or less of their pre-tax income. They'd like to refinance to take advantage of a 5 percent interest rate, but they can't because the value of their home is at or slightly below what their mortgage is. So, the mortgage might be 105 percent of the value of the home and shrinking. They'd like to refinance, but can't because their current mortgage is more than what their home is valued at. 

So, when will we be able to get a piece of paper and fill something out and be able to make this work for us? According to the fact sheet released by the White House yesterday, the details of this program will be announced on March 4th, next month, and we are going to be able to call our lender and say, 'Am I eligible for a loan refinance or modification?' In the meantime, we need to get all the financial documents in order and get ready to call our lender.

Will any of this help? Let's hope so but only time will tell.