Are you late on your mortgage payments or current? Both answers can qualify you for a loan modification.

You qualify for loss mitigation services by a loss mitigation attorney if you are facing hardship.

Your finances: Has your situation changed? It doesn’t have to be that your mortgage interest rate adjusted or will adjust and your payment will be higher each month, but maybe your financial situation changed.

What’s the deal with your income? Has your income descreased? Maybe you are not making as much money currently compared to when you signed your current original mortgage documents.

Click here for more information on loan modification help

Your options when doing a modification on your existing mortgage, are somewhat similar to when you are qualifying for a home purchase loan or a refinance.

The main difference, though, is that it doesn’t have all of the same costs.

Some costs stay the same, but you will have penalties (from your late payments) and, if you’ loss mitigation attorney fees.

Click here for more on loss mitigation options

MSCI’s main world stock index was flat to slightly weaker. It dropped to its lowest level since September 2006 late on Wednesday.

The European Central Bank and Bank of England were both meeting to discuss monetary policy, although both were expected to leave rates steady at 4.25 percent and 5.0 percent, respectively.

Differing economic and rate prospects have been driving the dollar higher in recent weeks as the U.S.-triggered economic downturn spreads to the euro zone and Britain.

The dollar, however, slipped on Thursday against a basket of major currencies (^DXY - News) and was weaker against both the euro and pound.

The euro brought $1.4532, a gain of around 0.3 percent, and the pound fetched $1.7832, a gain of about half a percent.

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There’s no perfect valuation metric for houses, but two measures–price-to-rent and price-to-income–are the best we know of. Asha Bangalore of Northern Trust provides recent charts of both, and a quick glance reveals how expensive house prices still are.

Price to Rent

Asha calculates the price-to-rent ratio using the Case-Shiller price index and the “Owner’s Equivalent Rent” component of the CPI. The horizontal “means” in her chart are one standard deviation above the long term mean (i.e., they’re not the average…they’re a standard-deviation higher than the average*). The higher mean includes the high prices of the bubble years, and the lower one doesn’t. Either way, it’s clear that house prices are still well above their long-term average level relative to rents. (And don’t forget that prices spend about half the time below the…

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Give Wachovia’s board credit for honesty. The board fired Ken Thompson, who had been chief executive since 2001, and did not mince words in explaining why he was leaving.

It is not clear what was new — the news release claims that nothing was — but this comes only weeks after the board stripped him of the chairman’s title.

Mr. Thompson’s greatest error of judgment was the 2006 acquisition of Golden West, an aggressive mortgage lender that was a leader in offering pay option mortgages — the ones where a borrower could pay less than the interest owed — in California and Florida.

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LOS ANGELES - More U.S. homeowners fell behind on mortgage payments last month, driving the number of homes facing foreclosure up 65 percent versus the same month last year and contributing to a deepening slide in home values, a research company said Tuesday.

Nationwide, 243,353 homes received at least one foreclosure-related filing in April, up 65 percent from 147,708 in the same month last year and up 4 percent since March, RealtyTrac Inc. said.

Nevada, Arizona, California and Florida were among the hardest hit states, with metropolitan areas in California and Florida accounting for nine of the top 10 areas with the highest rate of foreclosure, the company said.

Irvine, Calif.-based RealtyTrac monitors default notices, auction sale notices and bank repossessions.

One in every 519 U.S. households received a foreclosure filing in April. Foreclosure filings increased from a year earlier in all but eight states.

The combination of weak housing sales, falling home values, tighter mortgage lending criteria and a slowing U.S. economy has left financially strapped homeowners with fewer options to avoid foreclosure. Many can’t find buyers or owe more than their home is worth and can’t get refinanced into an affordable loan.

Efforts by government and the mortgage industry to stem the tide of foreclosures aren’t keeping up with the rising number of troubled homeowners.

The April data show nearly half of the properties received an initial notice of default, suggesting many homes were new entrants to the foreclosure process.

“We’re still sitting at roughly the same percentage of loans handled in any way successfully as we were a year ago, and the volume (of foreclosure filings) still keeps going up,” said Rick Sharga, RealtyTrac’s vice president of marketing. “It’s apparent that what they’ve tried so far isn’t working.”

The U.S. House passed a bill last week that would offer government insurance on $300 billion in new mortgages to refinance loans for an estimated half-million borrowers facing foreclosure, particularly those who now owe more than their houses are worth because of declining values.

House lawmakers also passed a bill that would send $15 billion to states to buy and fix foreclosed homes.

Still, should the homeowner aid package clear the Senate, it faces a potential hurdle in the White House, which has threatened to veto the plan, arguing it’s too risky and amounts to a lender bailout.

Even if a legislative compromise is reached, it could come too late for homeowners with adjustable-rate mortgages scheduled to reset to higher rates this month and the next.

More than 1 million home foreclosures are forecast for 2008.

“It doesn’t look like the volume is going to slow down any time soon,” Sharga said.

More than 54,500 properties were repossessed by lenders nationwide in April. In all, about 2 percent of U.S. households were in some stage of foreclosure during the month, RealtyTrac said.

Still, as foreclosed properties pile up, they add to the inventory of homes on the market and can drag down home prices. The impact is felt mostly in regions where foreclosures are concentrated, such as Southern California, the Las Vegas area, South Florida and parts of Arizona.

Nevada posted the worst foreclosure rate in the nation, with one in every 146 households receiving a foreclosure-related notice last month, nearly four times the national rate.

The number of properties with a filing jumped 95 percent versus April last year but declined 5 percent from March.

California had the most properties facing foreclosure at 64,683, an increase of 112 percent from April 2007. The number of properties declined less than 1 percent from March.

The state posted the second-highest foreclosure rate in the country, with one in every 204 households receiving a foreclosure-related notice.

California metro areas accounted for six of the 10 U.S. metropolitan areas with the highest foreclosure rates, led by Merced, with one in every 66 households receiving a foreclosure notice.

Arizona had the third-highest foreclosure rate, with one in every 224 households reporting a foreclosure filing in April. A total of 11,620 homes reported at least one filing, up nearly 181 percent from a year earlier and up 26 percent from the previous month.

Like Las Vegas and inland regions in California, areas of Arizona saw a sharp run-up in speculator-driven home prices and new home construction during the housing boom.

Florida had 35,264 homes reporting at least one foreclosure filing last month, a 146 percent jump from a year earlier and a 17 percent hike from March. That translates into a foreclosure rate of one in every 242 households, the fourth-highest in the nation.

The other states among the 10 with the highest foreclosure rates in April were Colorado, Maryland, Georgia, Ohio, Michigan and Massachusetts.

Mortgage industry executives were skeptical, however, since only borrowers who had not been in arrears before their mortgage rates increased could qualify. That doubt was prescient: As of last month, fewer than 5,000 borrowers had taken advantage of the plan, the Secure program of the Federal Housing Administration, to escape mortgages on which they had become delinquent.

Last month, the housing agency said that it would relax delinquency restrictions for the Secure program. Whether the new changes will be enough to meet the administration’s original goals, however, remains a subject of debate.

The basics of the program are unchanged. Borrowers who face rising interest rates on their adjustable-rate loans can refinance those loans, taking out less costly fixed-rate mortgages from the agency, which are designed mostly for borrowers who have relatively little down-payment money available.

Many of those currently facing foreclosure have recently been hit with sharp increases in their adjustable-rate mortgage payments, or are about to be.

Advocates for homeowners say that the best way for such borrowers to remain in their homes is to stabilize their loan payments at levels they were able to afford before the adjustable-rate mortgages were readjusted.

“We’re trying to loosen up the eligibility” by changing the arrears policy, said Meg Burns, the agency’s director of the Office of Single Family Program Development. “We’d heard it is hard to meet the criteria.”

The new Secure guidelines offer enrollment to borrowers who have missed up to two mortgage payments in the previous 12 months, even ones before the adjustable rate rose. But such borrowers must have 10 percent equity in their homes, or they must persuade their loan servicer - those who bill the borrower every month, and who typically hold the mortgage - to reduce the total amount of the mortgage enough for borrowers to reach the 10 percent equity threshold.

In some cases, Burns said, lenders can take a second mortgage on the house to cover the difference. Or, she said, lenders may choose to simply write off a portion of the loan.

Burns added that under the program’s more forgiving standards, more borrowers would qualify for the program than under the previous rules.

Tom Deutsch, deputy executive director of the American Securitization Forum, a trade group that represents mortgage-servicing companies, said the new guidelines have been “appropriately relaxed.”

Borrowers with dismal financial profiles have faced difficulties when seeking to have major portions their mortgages written off in recent months, industry executives said. With the Secure program, Deutsch said, servicers would handle such situations on a case-by-case basis.

It is not clear how many additional borrowers may be helped by the new standards. Richard Tracy Jr., president of Campbell Mortgage, a brokerage firm in Connecticut that specializes in the housing agency’s loans, said many of those with poor credit who received “exploding” adjustable-rate mortgages - loans whose rates rise sharply after two or three years - probably should not have qualified for loans in the first place, he said.

“And for the few people who’ve asked us about this,” he said, “their credit had deteriorated so badly, by the time we got to them it was too late to do anything.”

NEW YORK (CNNMoney.com) — Mortgage financer Fannie Mae warned Tuesday that the tumbling home values and loan defaults that have crippled the U.S. economy are likely to worsen, after posting a far larger-than-expected first-quarter loss.

The firm said it now forecasts that home prices will sink 7% to 9% this year, 2 percentage points worse than its previous decline range forecast, a drop that could leave prices 19% off of peak levels.

Fannie also increased its reserves to cover bad loans it has backed by nearly $2 billion, and said it expects a worse outlook for credit losses in 2009 than it is seeing this year.

To preserve the capital needed to ride out the rough times ahead, Fannie Mae (FNM, Fortune 500) announced it is slashing its dividend and will try to raise $6 billion through additional stock sales.

But company officials insisted that the current market problems should provide opportunities for Fannie to grow its business and see greater revenue ahead.

“As the initial shock of home price declines dissipate and markets settle down from volatility of the last nine months, we’re seeing tremendous opportunity,” CEO Daniel Mudd said during an hour-plus conference call company executives held with investors Tuesday morning. “As the market recovers, we will be a prime beneficiary.”

While shares of Fannie plunged 6% at the open to $26.66 after the quarterly results, they recovered to be up nearly 3% in midday trading following the call.

Helping the mortgage markets
Still, Mudd warned it will be a challenging year or more ahead for Fannie. The firm and Freddie Mac (FRE, Fortune 500), the other govenment-sponsored mortgage finance firm, are being asked by Congress to do more to help pump billions of dollars into the mortgage markets and stop the decline in home sales and prices - at the same time that they are struggling with losses of their own.

To that end, Fannie announced that the Office of Federal Housing Enterprise Oversight (OFHEO), the federal regulator that monitors its activity, has relaxed some of the regulatory restraints on it.

It let Fannie out of a May 2006 consent decree, imposed at a time the firm was working to clean up problems with its accounting.

It also said that once it completes its efforts to raise the $6 billion in capital, it would loosen the excess capital it is required to keep on hand down to 15% from its current requirement of 20%. It will be able to drop that to 10% in September.

OFHEO had been requiring both Fannie and Freddie to keep 30% excess capital on hand until lowering the requirement in March.

The latest move on capital requirements could make tens of billions of additional dollars available for home loans.

While both firms are owned by shareholders, not the government, the fact that they were created by the government raises the risk of a taxpayer-funded bailout should defaults and losses increase on the trillions of dollars in mortgage loans they have guaranteed.

Fannie Mae and Freddie Mac specialize in loans made to borrowers with good credit who make large downpayments on their home purchases, rather than the riskier subprime loans that have shaken markets in the last year. Nevertheless, both have been hit by rising mortgage defaults and turmoil in the credit markets.

Worse than forecast
Fannie reported it lost $2.2 billion, or $2.57 a share, in the first quarter, compared to earnings of $961 million, or 85 cents a share, a year earlier. Analysts surveyed by earnings tracker Thomson First Call had been forecasting a loss of 81 cents a share.

The loss was larger than the most pessimistic forecast, which was for a loss of $2.40 a share.

The result marked the third straight quarter of losses at the government-sponsored mortgage financier, although it was an improvement from the $3.6 billion net loss in the fourth quarter of last year.

Fannie is struggling with rising loan losses caused by problems in the housing market. It raised its loan loss reserves to $5.2 billion from $3.4 billion three months earlier.

At the end of the quarter about 1.15% of single family homes it backs were seriously delinquent. That’s up from the 0.98% that were that far behind at the end of 2007.

It also announced that the fair value of its net assets plunged to $12.2 billion at the end of the quarter from $35.8 billion at the start of the period. It blamed market volatility and home price declines for that fall.

Its mark-to-market losses, which come about when it has to adjust the value of its holdings, rose to $4.4 billion in the quarter from $3.4 billion in the fourth quarter.

As part of its turnaround plans, Fannie announced a new refinancing option for homeowners whose loans are owned by Fannie who are up-to-date in their payments but now owe more than their home is now worth. It would allow those homeowners to refinance at up to 120% of the home’s current value.

Previously, Fannie would only purchase loans in which homeowners held considerable equity in the property.

Mudd said that despite the problems faced by the firm, it is benefiting from the current housing and credit woes, as it has been able to grow its book of business.

Net revenue rose to $3.8 billion from $3.1 billion, while its market share in new mortgage-backed securities that were backed by single-family home loans rose to 50.1% from 48.5% three months earlier.

“This is likely to be the story for the months ahead - a painful cure from the housing correction - and incredibly healthy opportunities from our resurgent role at the center of the recovery,” said Mudd in the company’s statement. “Both are happening at the same time.”

ResCap, the eighth-largest U.S. residential lender in 2007, said Monday that it will not be able to pay its debt obligations unless it comes up with an additional $600 million by the end of June.

ResCap is seeking a $3.5 billion credit line from GMAC. ResCap is also asking GMAC to retire $350 million of outstanding debt and extend an additional $150 million through an existing line of credit, the company said in an SEC filing.

On Monday, ResCap began offering as little as 80 cents on the dollar to exchange or buy back $14 billion of bonds to extend maturities until 2010 or 2015 and stave off bankruptcy.

ResCap has lost $5.3 billion in the past six quarters, Bloomberg reports.

Last week, losses at ResCap contributed to a $589 million first quarter loss at GMAC.

GMAC is owned by General Motors Corp., with a 49%, and Cerberus Capital Management LP, which holds the remaining 51%. Cerberus also owns controlling stakes in Chrysler LLC and Chrysler Financial.

GM last week said that $276 million of its $3.3 billion first-quarter loss was due to its stake in the finance company.