Obama Loan Modification Program

So just who will qualify for President Obama’s loan modification program? The Affordability and Stability Plan will allocate $75 billion dollars to help borrowers stay in their homes – but it will not help everyone. Who will qualify for help and which lenders are participating? Here is some helpful information if you are interested in applying for this federal plan.

There are strict guidelines for qualifying for this loan modification program. If you try to call your lender yourself, you could very easily get denied. We see this happen time and time again. If you tell your lender you make too much or too little you will be denied.

The Obama loan modification program is actually very good for homeowners. If you do get qualified, you will reduce your mortgage payments to 31% of your total income. This is accomplished in a few ways.

A very important benefit from the home loan modification program for the homeowners is the ability to have their monthly payments set with a reduced interest rate. In other words, they have a payment set that is no more than 31% of their total monthly income.

This loan modification program will also take $1000 off the borrower’s loan principle for each year they maintain repayment without default for up to five years. In other words, in order to get this benefit, they must make all monthly payments on time.

If the value of a homeowners home has dropped by at least 15%, this program give the option of refinancing the home to a loan with a fixed rate of 4.5%. This is a very beneficial part of the loan modification program for the person who purchased his/her home during a housing boom, and is now suffering from the housing recession.

What if I am already facing foreclosure?

If you are already facing foreclosure a loan modification is a great way to stop the foreclosure process. Obama’s loan modification program provides incentives for people in the foreclosure process and those not in it to modify their loans. Every application is reviewed by the lender individually and must meet certain guidelines.

What if I am not delinquent on my mortgage?

With Obama’s loan modification plan you do not need to be behind on your mortgage to qualify. However, it is critical that you demonstrate that due to a financial hardship you will not be able to continue making your payments and that it is in the lender and your best interest to receive a modification.

What if my house is worth less than I owe, can I still get help?

In Obamas loan modification plan there are provisions that can reduce the principal balance. This decision will be up to the discretion of the lender, however there is hope that you will be able to reduce your mortgage.

This seemingly way of double talking has only help spur on the fears the American public has about the Federal bailouts, the stimulus package for local governments, and the ongoing debate of the reconstruction of our healthcare industry. Politicians have more than gotten their pork spending pet money projects passed, and with it, the hopes fade that the American homeowner will see the real benefits of Obama’s loan modification program. Now, the federal government’s greedy hands are delving into the automobile industry and creating a horrific demolition derby of it.

In order to process your application for the federal loan modification program, you must provide the lender with a detailed hardship letter, a thoroughly completed application form, a detailed income statement, and proof of your debt. There is no fee associated with applying for loan modification under the Affordability and Stability Plan.

The good news is that successful borrowers will also be given a financial incentive for keeping their new modified loan current. The incentive will grow for each month that the payments are made on time, with a possible $1000 bonus that will be applied directly to their mortgage balance for each year the payments are current, for a totoal of 5 years. Now is the time for financially strapped borrowers to begin learning more about how to qualify for this loan modification program and submit their paperwork for approval. Help is available for borrowers who know how to get it-make sure you do everything you can to save your home.