Now some may say that the Making Home Affordable program is a waste of taxpayer money, but the since it is out there, people in need should take advantage.

The first thing you have to know if you want to participate is what percentage of your gross monthly income goes toward paying your house payment. The number includes payments on the principal, interest, taxes and insurance on your home. If it isn’t greater than 31 percent, you are out of luck and need to find another way to ease your financial burden. Maybe filing bankruptcy will help?

If you made it through the first test, then you have to find out if Fannie Mae or Freddie Mac, the government-backed mortgage holders, own your mortgage. You can do this by visiting the Web sites of each lender and enter information about your home.

Once that is determined, get ready for the negotiations with the bank that is servicing your mortgage. While Fannie Mae or Freddie Mac own your mortgage, they count on the banks that service the mortgages to handle the paperwork involved in the process and decide which homeowners qualify.

Each case will be treated differently. If your house payment is more than 31 percent of your monthly income, the bank will use other costs that you have to determine if you can still make the payment if the interest rate is lowered.

You have to already be behind on payments to be considered by most banks. They will take into consideration how much savings you have, income prospects over the next nine months to one year, and other monthly expenses that you incur.

It isn’t likely that they are going to approve a modification if you are spending a large percentage of your income on health club memberships and private school tuition. It will be a subjective and sometimes humiliating look at your financial situation.

Of course, a report in the Wall Street Journal today says that some lenders are starting to write off principal when modifying troubled mortgages. It says that 10 percent of the modifications approved in the second quarter of this year involved principal reduction.

What you have to remember is that there are lots of options out there. It is also important to remember that these are business transactions. You have every right to use all the tools and programs available to you to save your home. And remember, you can still file bankruptcy to prevent foreclosure on your home.