First of all, you will want to gather up your financial documents. This should include your mortgage statements, both your primary mortgage and secondary mortgage if you have one. You will also need information that documents your income such as your current pay stubs and most recent income tax return. Additionally, you will want your recent bank statements and investment statements. Lastly, you will need to have other financial information such as amount owed on car loans, credit cards and any other consumer debt.

Now that you have all of your financial information together, go to the Making Home Affordable website and click on the “Find Out If You Are Eligible” link. Next, select the program type that best fits your situation, either loan modification or refinancing. You may want to review both your options to see which you’re most qualified for. If you don’t qualify for either program based on their web application and still feel that you need assistance with your home loan, don’t get discouraged. You may still qualify for other programs or for lender based loan modifications.

After you’ve determined your qualifications for the Making Home Affordable you will want to get in contact with a HUD-certified housing counselor. You can find one by calling the HUD information line at 1-888-995-4673 or going to the Department of Housing and Urban Development Foreclosure Avoidence Web site. You should be prepared to take notes when you speak with a housing counselor on the phone. Jot down the names of the people you talk to, the date and time as well as the basics of the conversation such as promises that were made or if your were denied. You should also receive a case number. I recommend keeping a notepad handy for this purpose because staying organized is quite important in this effort.

If your current lender gives you a hard time in your refinancing efforts, a new rule change may help you. This new rule allows homeowners who have a mortgage that is guaranteed by Freddie Mac to refinance with any Freddie Mac affiliated lender. You will also be able to roll a larger percentage of you closing costs into the refinancing as well. This additional flexibility in the program should help those who’ve had frustration in obtaining a home loan modification under the current rules from certain lenders.

It is important to remember that you must be current on your mortgage loan to qualify for a government-sponsored refinancing plan. Should you be behind on your home loan you may still qualify for a loan modification under the Making Home Affordable program.

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The Obama administration recently announced a new plan designed to help these underwater mortgages be refinanced. Administration sources estimate that the new plan would help at least 1 million Americans refinance to lower rates. However, such government plans in the recent past have been failures. Will things be different this time?

First of all, the details of the plan and how to qualify for it are still a bit sketchy. This is probably due to it being more of a re-election campaign ploy at this point, especially considering it was unveiled at a glitzy Hollywood campaign fundraiser held in the ultra-luxury Bellagio hotel. But, here are details I’ve been able to glean so far.

First of all, Obama’s new mortgage relief plan involves a regulatory change in the current mortgage assistance plan ran by the Federal Housing Finance Agency. The plan calls for the FHFA to remove the regulation that prevented Fannie Mae and Freddie Mac backed mortgages from being refinanced when the value of the home exceeded 125% of a home’s current appraised value. This is an extension of less-than-effective Home Affordable Refinance Program (HARP).

The second part of the proposal is to extend the refinancing program through December 2013. The program was previously scheduled to end in June 2012. This part of the plan seems to be intended to allow the program to give homeowners additional time to qualify and to extend it’s effects through the 2012 election rather than having them end just months before.

The last part is that the mortgage holder has to be current on their mortgage for at least 6 months. For many people who’ve suffered job loss and other financial troubles due to the recessionary economy this may not be the case and it makes them not eligible for the program.

However, there is an even bigger problem with the plan. Mortgage lenders have no legal obligation or significant financial incentive to refinance the potentially troubled mortgages they currently have on their books. This has been one of the major problems with HARP and will remain so even with these changes.

There are many sad stories involving people who’ve tried to get refinancing on their home loans through the Home Affordable Refinance Program and still had their home foreclosed on. Banks have found it easy to string people along while dealing with their big backlog of foreclosures, extracting what payments they could by using refinancing promises while pursuing foreclosure at the same time. We can expect this trend to continue under HARP even with this expansion.

So, to recap, the plan, which is basically an expansion of the current Home Affordable Refinance Program, does offer homeowners with underwater mortgages an opportunity to refinance at lower rates, provided that they can get their lender to go for the deal. Poor credit ratings after tough times will prevent some people from pursing loans from other lenders but should one have good credit they will be able to shop around for the best mortgage refinancing deal.

It is likely that there will be mortgage brokers who will cater their business operations directly to this refinancing plan. Use caution in pursuing these deals and make sure that you aren’t being shown something that’s “too good to be true”.

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