Making Home Affordable, the $75 billion foreclosure prevention program that was announced in February and officially came out in early March, has recently swung into action. This program allows qualified homeowners to refinance to a lower rate even if their home value has decreased. The second component of this program allows struggling homeowners to modify their loans to make their monthly payment more affordable.

There was a crucial component missing in the original release of the program—second mortgages. About half of borrowers at risk have second loans that make it difficult to substantially lower their monthly payments from modifications to the primary mortgage.

With the new edition, lenders will receive additional incentives to modify these second loans, which include home equity loans. The borrower’s interest rate could go as low as 1% because the government will split the cost of the reduction with the bank. The program aims to help between 1–1.5 million additional homeowners keep their homes.

For more information, check out: http://makinghomeaffordable.gov/