Federal Loan Modification

Barack Obama has seriously proved that change is good, and he is proving so by his actions. Among the dozens of good changes that he has already implemented since assuming office early this year, the most significant is the loan modification program that he has planned and worked on. The Obama federal loan modification is special because for the first time in history, there’s a loan relief program that is really to the advantage of the homeowners and not just another gimmick to make the lenders happy.

The federal modification program is running with their rules that the institution those are actively involve, should appraise the eligibility and every loan taker who desires to take the facilities. All the institution of the nation are participating in the method. Those who are defaulters, this method will provide considerable decrease interest value. The rate is as low as 2%. Besides, treasury division is well-known division and along with the financial incentives the treasury division of the federal system can help the money givers markedly to attract participation from them.

First trust deeds as well as second loans-such as home equity lines-are eligible for participation. Lenders are asked to sign an agreement with the Treasury Department that mandates the bank make a diligent effort to offer loan workouts to qualified homeowners. Participating lenders will use a standard method of terms to arrive at the new target mortgage payment. While the application is being reviewed and a determination made, foreclosures and trustee sales will be halted-although foreclosure filings are allowed.

You do not have to be delinquent to qualify for this aggressive government loan modification plan-in fact lenders will receive a special incentive payment for each loan they modify before it becomes late. As long as you are facing a financial hardship situation and you can prove your income, you may be able to qualify for help using this plan. You must live in the home as your primary residence, and your loan must have been originated before January 1, 2009 and have a balance of less than $729,750.00. Your loan does NOT have to owned by Freddie Mac or Fannie Mae to qualify for the modification plan.

The intention of the Obama federal loan modification program is reduce the repayments of homeowners to affordable levels that can be sustained on an ongoing basis. The maximum total monthly repayment level (including capital repayments, interest, insurance and tax) that is available is 38% of gross monthly income and that is only available under special circumstances, the more typical maximum for people meeting the qualification criteria is 31%.

MHA, or Making Homes Affordable, offers this list of current lenders taking part in the Obama federal loan modification program (in alphabetical order):

1. Bank of America.
2. Carrington Mortgage Services.
3. Chase.
4. CitiMortgage.
5. Countrywide.
6. GMAC.
7. Green Tree Servicing.
8. Home Loan Services, Inc.
9. Ocwen Financial Corp.
10. Saxon Mortgage Services.
11. Select Portfolio Servicing.
12. Wells Fargo Bank.
13. Wilshire Credit Corp.

Now it’s time for more families to know about it and take advantage of it as well. America needs all the families it can to be using this program. That might sound like a bold statement but while those families are being helped, so is the economy. That is another reason why the loan modification system needs more publicity. For all those people involved, the money that they are saving is still going back into the economy in some way, shape or form; directly or indirectly. It may take some time but that will help to repair America’s faltering financial state.