The federal loan modification plan enacted by President Obama features standardized terms and eligibility requirements designed to offer help to almost 4 million homeowners.
The plan is called Home Affordable Modification or "HAM'.
Funded by $75 billion in stimulus money, it offers a unique pay to modify feature that actually rewards lenders and borrowers for modifying eligible loans.
How do you apply and qualify for this plan and which lenders are approved to offer it to their clients? How to Qualify: You must be able to meet certain requirements to apply for a loan modification using this federal plan.
If you can answer yes to these questions, you may be a good candidate.

• Do you live in the home as your primary residence?
• Was your loan originated before January 1, 2009?
• Is your loan amount less than $729,750?
• Does your current mortgage payment equal more than 31% of your gross income?

If you can meet the basic criteria, you may be able to modify your current loan with a reduction in the interest rate as low as 2% and extend your term for up to 40 years.
In some cases, part of your principal balance may be deferred or forgiven in order to reach a new target payment of just 31% of your gross monthly income.
Which lenders are approved to offer this federal loan modification plan? Here is a list of the banks and servicers who have signed formal agreements with the Treasury Department and are offering the program to eligible borrowers: Approved Lenders:

1. Aurora Loan Services LLC
2. Bank of America, NA
3. Carrington Mortgage Services, LLC
4. Chase Financial LLC
5. CitiMortgage, Inc
6. Countrywide Home Loans Servicing LP
7. GMAC Mortgage LLC
8. Green Tree Servicing LLC
9. Home Loan Services, Inc
10. Nationstar Mortgage LLC
11. Ocwen Financial Corp, Inc
12. Residential Credit Solutions
13. Saxon Mortgage Service
14. Select Portfolio Servicing
15. Wells Fargo Bank, NA
16. Wilshire Credit Corporation

Additional banks and servicers are being added as they sign their formal agreements with the Treasury Department.
If your lender or servicer is not on the list, you can call them and ask if they are offering the federal loan modification plan.
Many banks are accepting applications while they wait for their formal approval.
At least you can get in the system and be in line for review.
This plan offers a one-time chance for homeowners to apply and qualify for an affordable modified mortgage, so make sure you understand the approval requirements before you contact your bank.
Homeowners who can provide acceptable information on their loan modification forms and can clearly prove in black and white that they meet the guidelines will be approved.
Incorrect or unacceptable applications will be denied, so take the time to learn and prepare before you complete your paperwork and contact your lender.
When you prepare beforehand, you can make any necessary adjustments to your financial statements before your lender reviews them.
Be smart-be prepared! It could be the difference between getting the help you need and deserve and being denied.