Some of the 3 to 4 million homeowners eligible for loan modifications could see interest rates as low as 2 percent under the Obama administration's new "Making Home Affordable" (MHA) initiative.
Originally dubbed the "Homeowner Affordability and Stability Plan," MHA contains a provision to modify mortgages for qualified homeowners struggling to make the monthly payment.
A loan modification, unlike a refinance, changes the terms of the existing loan without writing a new one. Modifications are designed to make mortgages more affordable.
Also called a "workout," this provision is open to anyone including those who haven't missed payments, but may be at risk of missing payments.
The modification plan is open to anyone with any loan that has a balance under Fannie Mae and Freddie Mac limits, which now as high as $729,750 in some high-cost areas.
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