I am mostly interested in qualifying for a modification that includes a principal reduction. I have an option arm and the unpaid interest is added every month to the principal balance. I am currently upside down with what houses are going for in my neighborhood by about $175,000. Is there any point in applying for anything if I'm not delinquent on my payments?

yes there is, as long as your income to mortgage ratio is 31% or higher and you are upside down with no other properties owned then you could qualify.
I was recently approved by FHA for the Hope program and I am now waiting for approval from countrywide.
I have excellent credit have never been late on pymts I just have an interest only loan that will adjust in 2010.
I'll keep you all posted on our progress with countrywide..

How did you get started with the Help for Homeowners Program? Did you just go through your lender or what? There's so many scam artists out there, it's hard to know what to do first or who to believe or who to contact to get help. So any advice you can give us would be much appreciated. As you can see, we're all at a loss as to how to get help for this program. How did you?

Also, how much did it cost you? Is that $5,000 based on house value or anything else, the fee they charge?

No I called a company called IGS they have a website called hope to homeowners and have an a++ rating with the BBB (better business breau).
Go to the website and call the 800 number they will have someone call you back to qualify you.
Great customer service and we got FHA approval quickly.
We are just waiting for a response from Countrywide now.
You will have to pay 995.00 upfront and another 2995.00 if you get the hope program.
If you don't get it then they will try to do a loan mod with your lender which the 995.00 covers.

That's the same website I went to and the same company I dealt with. The guy I talked to, however, got real pushy with me when I started having reservations about charging $4,000 to a credit card (it does not good to modify my loan if I can't pay my credit card bills to do so). That's when he started with the, "Yeah, but we're getting them to write off $100 grand for you." He had a real attitude, like "What's the matter with you? Are you an idiot or what?" That's when I put the brakes on and told him to refund my credit card for the $995, as I'm not going to pay for someone to treat me like that. Plus, he couldn't keep his story straight. First, he told me all the money went to closing costs, but if that's the case, why be so pushy? Then I spoke to his supervisor, and he did inform me that they do get part of the fee for their services. That explained why he turned into a used car salesman when I said no! Anyway, they never charged my credit card, even though they sent me an email saying they did, so everything was okay on that end. At this time, I'm going to sit tight and see what they do for you, as you're the only person on this whole website who seems to have had any success or anything close to success. Please, keep us all posted, as I do agree, it's worth the $4,000 if they can actually do a principal reduction[/b][/u]. However, if they only do a loan modificaition, there are other companies out there doing the same for $1000 less.