By Susan V. Gregory
Homeowners facing financial hardship may qualify for help on their second mortgages with the federal loan modification plan enacted by President Obama. The very aggressive loan workout program is aimed at reducing mortgage payments so that borrowers can avoid foreclosure and stay in their homes. This plan is extended to include second trust deeds. If you have a second mortgage, here is some helpful information on how to apply for a loan modification using this program.
This is a voluntary program, but most lenders are expected to be participating. The Treasury Department will pay banks up to $4500 for each qualified mortgage that is modified under the program. That is a big incentive to get the lenders to offer help to desperate homeowners. In addition, borrowers will be paid-for-success under this plan. Eligible homeowners will receive $500 upfront and $250 for three years as long as they do not re-default. This bonus payment will be credited towards the loans outstanding balance.
A loan modification on a second loan under the federal plan could include lowering the interest rate to 1% for five years to achieve an affordable and sustainable payment. The government may subsidize part of the participating banks losses caused by the new loan terms. Another option under this federal loan workout involves paying the bank that holds the second lien up to 12 cents on the dollar to retire the debt. This will be at the banks sole discretion and is not mandatory.
Interested homeowners will be asked to prepare a loan modification application and provide evidence of a financial hardship situation. A determination will be made based on this information, and qualified homeowners will be eligible for this aggressive program. A successful borrower will be able to submit a complete and accurate application that meets the requirements for approval. Make sure you understand how to prepare your paperwork before contacting your lender. A new lower payment could be the solution you need to stay in your home-make sure you take the time to do it right.
You can get the help you need to apply and qualify for a [http://www.myloanmodificationcenter.com/]loan modification on your first or second loan by ordering and downloading the best selling handbook for homeowners, The Complete Loan Modification Guide. This is a low cost, easy to read home edition loan mod kit that will provide you with everything you need to prepare a professional and acceptable loan modification application.
You are provided with all of the necessary forms and given detailed directions on how to complete them properly. The Complete Loan Modification Guide will take you step by step through calculating your debt ratio, completing the financial statements, writing your hardship letter and then putting it all together to submit to your lender. Learn how to apply and qualify for the Obama federal program too. Get started today on the path to secure home ownership, order and download The Complete Loan Modification Guide.
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