The North Texas Housing Coalition (NTHC) has committed their support to the “Making Home Affordable” program announced by the Obama administration in February. The plan demonstrates the focus on supporting foreclosure prevention and neighborhood stabilization initiatives in order to help a great many homeowners.

The Homeowner Affordability and Stability Plan (HASP) is designed to help more than 7 million responsible homeowners avoid foreclosure by either restructuring or refinancing their mortgages.

HASP has three goals as set by the Obama administration. The first is to help cut down on foreclosures by refinancing mortgages of “responsible” homeowners. The second goal is to provide more than $75 billion in loan modifications to help the millions of “at-risk” homeowners. Finally, the HASP plan wants to bring down mortgage rates by bailing out troubled Fannie Mae and Freddie Mac.

What is the definition of a responsible homeowner? According to the Obama administration, a “responsible” homeowner is one who has a conforming loan, owned or guaranteed by Fannie Mae or Freddie Mac. They also have to be current on their monthly mortgage payments and should have loan-to-home value ratios above 80 percent.

With the continuing decline in the housing market and housing values, these homeowners are currently unable to refinance their existing loans. This new plan would allow Fannie and Freddie to refinance these loans at lower rates until June 2010.

“At-risk” homeowners are those families and individuals who are either currently behind on their payments or who are current but are at the point of imminent default on their mortgage. Homeowners whose debt is more than 55 percent of their total income or who are already in foreclosure are also considered at-risk.

Part of the HASP program entails low-cost refinancing and lower mortgage interest rates. A standard for loan modifications is also part of the plan and states that any modifications completed under the HASP plan must be in place for at least five years, and that under the plan, a homeowner’s mortgage debt-to-income ratio will be brought down to 31 percent. Loan modifications can be made under the HASP program until December 31, 2012.

NTHC and other HUD certified counseling organizations stand ready to do their part to help qualified homeowners prepare to talk to their lender and to take full advantage of the bold plan announced by the Obama administration.

Community-based foreclosure intervention counseling provided by nonprofit certified counselors is a critical part of the foreclosure prevention process. Nonprofit counselors can help homeowners understand their options and the steps they can take to stay in their homes.

For more information about the Homeowner Affordability and Stability Plan, visit www.financialstability.gov. For more information about the North Texas Housing Coalition, visit www.nthcinc.org.