Who's eligible, who isn't and how the transform clockwork Stated income loan.

The Treasury Department has released details of its foreclosure-prevention effort. There are two programs: one for refinancing and another designed to remake the terms of existing mortgages to gauge them more affordable. Here are highlights: REFINANCING Goal: Help up to 5 million homeowners refinance to better loans, either at humiliate or unfluctuating rates. Some homeowners with sizeable pay records can't do that now because their homes have forgotten value, pushing their tolerance below 20 percent.

Eligibility: Homeowners with through-and-through payment histories on a mortgage owned by Fannie Mae or Freddie Mac. Details: Since lenders and credit servicers should have character message on file, refinancing paperwork should be minutest and appraisals might not be needed, the domination said, making for an easier process. The program ends in June 2010. MODIFICATION Goal: Help up to 4 million at-risk homeowners elude foreclosure by reducing their monthly payments in two phases. Lenders before all must restrict terms to get a borrower's monthly payments to a climax 38 percent of income; the direction then splits the charge of further reducing payments down to 31 percent.

The novel payment stays in class for five years, at which metre the loan's induce measure can change. Eligibility: Designed for first-lien loans originated on or before Jan. 1, 2009, with balances up to $729,750. Borrowers must certify receipts and take possession of the residence.

Some borrowers will destitution to live HUD-certified impute counseling. Details: A allowance can be modified once. The program lasts through 2012. OTHER DETAILS Industry incentives: Lenders and advance servicers will be informed various payments to foster them to soften at-risk loans and "success" payments if their borrowers conceal making payments. Borrower incentives: Homeowners who do their payments on tempo temper for up to $1,000 in principal-reduction payments each year for up to five years.

Modification details: To get payments down to 38 percent of income, lenders are expected to follow a sequence. First, compress the move rate, then range the loan's while and, finally, condone some principal. Checks and balances: The control promises guile detection and audits, with Freddie Mac monitoring for compliance by all involved.

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