On Thursday, the Treasury Department announced new guidelines for Obama’s foreclosure prevention plan. The new guidelines include for all applicants to provide all paperwork before getting a trial modification.

The new guideline will make it more difficult for homeowners to begin the process of modifying their home loans.

Homeowners have been reporting mortgage lenders have been asking for additional documents and miss placing them. Financial Institutes are claiming the homeowners are not submitting the proper documents needed.

As of June 1, all paper work must be completed in order to begin a trail period.

"They aim to make it easier and quicker to provide permanent modifications," said Treasury Assistant Secretary Herb Allison. "These changes also will enable servicers to process more efficiently and handle more volume effectively so we can help more people more rapidly."

Borrowers who are seeking for help from the plan will need to fill out a three page request form that explains their hardship and to list income and expenses. Borrowers will also have to sign a IRS 4506-T that allows mortgage lenders access to the borrowers tax returns.

Borrowers will also need to provide income, two recent pay stubs and other earning such as self-employment, benefits, or rental properties.

Once mortgage lenders receive the appropriate documents, they will need to acknowledge receipt within 10 business days. Lenders must notify the borrower of approval or if more documents are needed within 30 business days.

For borrowers who enter a trial period, once three timely payments are made they will automatically convert to long term mortifications.

"It will not lead to more modifications, but it will lead to more certainty," said Howard Glaser, head of The Glaser Group, a financial services analytics firm.

Wells Fargo is planning on putting the new guidelines in effect as of March 1^st.