Modification?

Mortgage Lenders Urged To Take Part In Housing Plan
U.S. bank regulators want lenders to participate in the new program to support home loan modifications,_ in order to ease downward pressure on house prices and foreclosures.

http://www.cnbc.com/id/29508073/

Here are links to several sites to help us understand the highlights of Obama's plan to stem foreclosures and to modify existing loans that may be in trouble.

http://treasury.gov/news/index2.html

http://www.financialstability.gov/

I have some concerns on whether this will truly work or not. 

1.  Lenders are only "encouraged" to participate. It is not mandatory.

2. Do borrowers have to be late currently or just about to be? I believe the answer is no according to the above links so that is good news.

3. It seems that one of the qualifications is that you are not able to qualify for a traditional refinance due to loss of equity in your home. In my initial research, it seems that there are two plans or options that you may fall under. 

http://www.financialstability.gov/  This website has a question and answer format that is good.  The two options are 1) a refinance option for those who owe about the same or more than their current value is and 2) the modification program.

 4. How will this affect someones credit report in the future?  This woud be helpful to those that aren't late yet and contemplating this as a solution to lower their interest rate and payment.

My concern is that the Hope for Homeowners program and the FHA Secure program were suppose to be the "savior" for people in need but those programs worked only for a few people. Lenders put their own spins and requirements on those programs so the success rate of these programs was negligible.

I am sure that as the plan unfolds and lenders add their interpretation, we will see how this plays out.