Information on Obama’s Loan Modification Program – The “Making Homes Affordable” Plan
President Obama’s Making Home Affordable loan modification plan will help as many as 5 million American homeowners to keep their homes. There is a $75 billion pool of funds offering lenders, borrowers, and servicers’ incentives for participation. This article contains information on the plan’s main features, and who is eligible as a homeowner for the loan modification program.
To be eligible, homeowners must meet the following qualifications:
1. Only primary residences are eligible – in other words, owner-occupied homes – ranging in size from one to four units per property.
2. The unpaid principal must be less than $729,750 on single unit dwellings. The balance may be higher for two to four unit properties.
3. The mortgage must have originated prior to January 1, 2009.
4. The current monthly payments, including all taxes, homeowners association fees, and insurance, must be greater than 31% of the household’s gross monthly income.
5. Homeowners may not be delinquent currently on their mortgage.
6. Homeowners may not be under bankruptcy protection.
This federal program is free, and the Department of the Treasury discourages borrowers from paying any third-party service a middleman fee for negotiating with the lender. Next, here is the formula used to reduce the monthly payments to 31% of the borrower’s gross monthly income:
1. reduced interest rate, to as little as 2%;
2. extended term of loan, to as long as 40 years;
3. principal forbearance;
4. principal forgiveness, at the lender’s discretion, and optional.
One salient feature of this program provides incentives to lenders and servicers for making this program available to their borrowers. Borrowers, who do not miss payments under the new modified terms, are eligible for as much as $5,000 in reduction of principal on their current loan, to help rebuild, home equity.
Homeowners can determine their eligibility for this loan modification program by calculating their current debt ratio, to see if they can reach a target payment of 31% of gross monthly income via the options above. Figure out your current debt ratio, to see if you qualify, before contacting your lender. Eligible candidates must provide their lending institution with all necessary documentation, including proper completion of loan modification forms. Learn how the process works, to pre-qualify yourself, and increase your chances of receiving the help you need to keep your home.
For more specific information about Obama’s Loan Modification Program, or how you can get approved for a [http://home-loan-modifications.info/]Loan Modification – visit my simple, no nonsense loan modification guide and resource: [http://home-loan-modifications.info/]http://Home-Loan-Modifications.info
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