The first six participants of the newest mortgage modification program have stepped up to the plate. They are some of the biggest names in the financial sector. Here are the names of those taking part so far; JPMorgan Chase, which will get up to $3.6 billion in subsidy and incentive payments; Wells Fargo, $2.9 billion; and Citigroup $2 billion. The others are GMAC Mortgage, $633 million; Saxon Mortgage Services, $407 million; and Select Portfolio Servicing, $376 million.

With the new program there will be millions of people who will be able to stay in their homes rather than face what would have been certain foreclosure. As with any modification program, the goal is to change one or more of the terms of the loan. In this case there will be several changes which benefit not only the borrower but also the lender which makes it a winning prospect on both sides.

With mortgage modification, monthly payments are reduced to a more affordable rate to the homeowner. Home owners who otherwise would not have been eligible for modification loans now are as long as an honest effort has been made to keep up payments. As indicated above, the lenders also get incentive which makes them more open to altering mortgage terms to fit the needs of the home owner.

With the recent Obama mortgage modification overhaul, the two-part plan calls for servicers to reduce monthly payments to no more than 31% of eligible borrowers' pre-tax income or to refinance eligible mortgages even if the homeowner has little or no equity. Interest rates will also be reduced which will also ease some of the burden of the home owner.

The program gives servicers $1,000 for each modification and another $1,000 a year for three years if the borrower stays current. It will also give $500 to servicers and $1,500 to mortgage holders if they modify at-risk loans before the borrower falls behind. Borrowers will also get up to $1,000 a year for five years if they keep up with payments. The funds will be used to reduce their loan principals.

The plan appears to be well thought out and offers something to both the lender and the borrower. There will also be strict monitoring of the program by the Treasury department to ensure it is running as planned. This insures both accountability on the part of the lenders and peace of mind for the borrowers. It is still early in the plan but with the big hitters signing up so quickly it seems lenders are very agreeable to the program requirements. There is also funding to promote education and information about the program to the public. Without the mortgage modification program, millions of people would have faced foreclosure despite the fact that they were making an honest effort to pay the mortgage. This program may just be coming to the rescue just in the nick of time.

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