Loan Modification Programs - Information About Obama"s Streamlined Federal Modification Program
Homeowners with unaffordable mortgages may be able to take advantage of a streamlined loan modification program that is an option to help prevent foreclosure.
President Obama has allocated $75 billion in stimulus funds to offer help to at risk homeowners in an attempt to halt the foreclosure crisis.
A streamlined modification process is being offered to borrowers who meet certain eligibility criteria and demonstrate a financial hardship.
The loan modification program-called Home Affordable Modification or HAMP- will reduce the monthly payment to equal 31% of the homeowners gross monthly income by using several options, such as:
Once approved by the Treasury Department, banks agree to abide by the standard guidelines and loan modification terms.
In return, the lenders will receive payment from the government for each loan modified under the program.
This is a big incentive for banks to proactively work with homeowners to find a loan workout solution.
You do not have to be delinquent to apply-but if you are at risk of default you may be a good candidate.
Not all homeowners will qualify, and borrowers should learn more about the qualifying criteria, how to complete the application properly and then submit their paperwork for final review and determination.
Since the guidelines are standard for everyone, either you qualify or you don't.
The secret to success is knowing what those guidelines are, and then tailoring your application so that you have the best chance of meeting the criteria for approval.
If you are confused about how to figure your debt ratio, new target payment, disposable income or any other approval trigger, then you may want to take advantage of a software program that does all the calculations for you automatically.
Simply input your own monthly income and expenses and you will see immediately if you need to make any adjustments to your budget in order to qualify.
You can avoid mistakes and save hours of frustration with this helpful too.
President Obama has allocated $75 billion in stimulus funds to offer help to at risk homeowners in an attempt to halt the foreclosure crisis.
A streamlined modification process is being offered to borrowers who meet certain eligibility criteria and demonstrate a financial hardship.
The loan modification program-called Home Affordable Modification or HAMP- will reduce the monthly payment to equal 31% of the homeowners gross monthly income by using several options, such as:
- Reducing interest rate to 2%
- Extending the loan term to 40 years
- Mortgage payments that equal just 31% of borrowers gross monthly income
- Principal forbearance or forgiveness
- Mortgage loans originated on or before January 1, 2009
- Borrowers cannot be in Bankruptcy
- Only primary residences allowed at this time
- Facing financial hardship situation
- Loan amounts $729,750 or less
Once approved by the Treasury Department, banks agree to abide by the standard guidelines and loan modification terms.
In return, the lenders will receive payment from the government for each loan modified under the program.
This is a big incentive for banks to proactively work with homeowners to find a loan workout solution.
You do not have to be delinquent to apply-but if you are at risk of default you may be a good candidate.
Not all homeowners will qualify, and borrowers should learn more about the qualifying criteria, how to complete the application properly and then submit their paperwork for final review and determination.
Since the guidelines are standard for everyone, either you qualify or you don't.
The secret to success is knowing what those guidelines are, and then tailoring your application so that you have the best chance of meeting the criteria for approval.
If you are confused about how to figure your debt ratio, new target payment, disposable income or any other approval trigger, then you may want to take advantage of a software program that does all the calculations for you automatically.
Simply input your own monthly income and expenses and you will see immediately if you need to make any adjustments to your budget in order to qualify.
You can avoid mistakes and save hours of frustration with this helpful too.
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