On March 4, 2009, the Obama Administration released detailed guidelines for homeowners to help them determine if they qualify for the Administration´s new Making Home Affordable plan.  This is a follow up to the Administration´s announcement on February 18 outlining their plan to stem the current tide of foreclosures and stabilize the nation´s housing markets.  

The plan has two primary goals:

1.To help homeowners in existing Fannie Mae or Freddie Mac loans that are current on their mortgage payments to refinance and take advantage of today´s lower interest rates.  Many of these homeowners are unable to refinance because of lost appreciation in their homes due to the continuing decline in home prices.  These homeowners still have equity in their home, just not the necessary 20% to get a refinance.  Under the Administration´s plan, Fannie and Freddie will be allowed to refinance qualified homeowners up to a 105 percent loan-to-value of the current value of the home.

2. To help homeowners who are at risk of foreclosure.The Administration is offering loan servicers and investors government assistance to help offset the cost of modifying qualified homeowners into affordable mortgages that will allow them to keep their homes. This may be done by reducing the mortgage interest rate, extending the term of the loan, principal forbearance, and/or principal cramdown. This program is voluntary and the servicers must agree to contracts with the Treasury to participate.

In addition, the Government warns homeowners to beware of foreclosure rescue scams:

 - There should never be a fee charged for information or assistance regarding the Making Home Affordable Program.

 - Beware of anyone who says they can "save" your home if you sign or transfer over the deed to your home. Do not sign over the deed to your property to any organization or individual unless you are working directly with your mortgage company to forgive your debt.

 - Never make your mortgage payment to anyone other than your mortgage company without their approval.

Advance Fees and Loan Modification Services

If you are behind in your mortgage payments, you may be contacted by individuals or companies that will offer to help you work out a loan modification with your lender or provide other services to you in order to help you prevent a foreclosure on your home.

You must be very careful if you are asked to pay for any of these services in advance, whether in cash, check or by charging your credit card. First, California Civil Code Section 2945, which regulates "foreclosure consultants", forbids anyone who falls under the definition of a "foreclosure consultant", as well as a real estate licensee, from collecting any advance fees for these types of services if a Notice of Default has been recorded against your property. If your lender has recorded a notice of default, do not pay an advance fee to a real estate licensee, or to any person or entity. California licensed lawyers when rendering services in the course of their legal practice(s) are exempt from this prohibition. There are non-profit agencies that can assist you without charging you a fee and real estate licensees who can represent you for a fee to be paid after they have completed their work. For information on non-profit housing counseling services, use the following links:

·                      Federal Housing Administration
 http://portal.hud.gov/portal/page?_pageid=73,1&_dad=portal&_schema=PORTAL

·                      Hope Alliance Web site
http://www.995hope.org/

If a Notice of Default has not been recorded against your property, it may be permissible for a real estate broker to assist you in working out a loan modification or otherwise negotiate a possible resolution to your problem with your lender or loan servicer and ask you for payment in advance for their services. However, the broker must have you sign an agreement that tells you what services will be performed, when they will be performed and how much you must pay. The broker cannot have you sign an agreement until it has been submitted to the Department of Real Estate for review and the broker has received permission to use it and collect the advance fee.

The following individual and corporate real estate brokers have submitted advance fee agreements for loan modification and/or similar services to the Department of Real Estate for review, and have received "no objection" letters regarding their use. You can obtain information on brokers and their locations by clicking on the "License Number" on the listing below or call (916) 227-0770.

·                      Advance Fee Agreement Listing
 http://www.dre.ca.gov/mlb_adv_fees_list.html

The Department of Real Estate does not approve, endorse, recommend or make any representations about any of the agreements or their terms, or any aspect of a licensee´s business activities. Consumers wishing to contract with a real estate broker for loan modification or any other similar or related services should carefully review the agreement(s) and consider obtaining independent advice before signing an agreement(s) or advancing any fees. Consumers should also consider comparing the services and fees offered by other licensed brokers on the list.

Note: Licensed real estate brokers who provide loan modification or similar services without collecting fees in advance are not required to receive the Department of Real Estate´s permission as long as their services are fully completed before you pay them.

(from Dept of Real Estate website)