| President Obama's New Home Mortgage Loan Modification Program - Relief in Troubled Times |
The recently changes in the economy has resulted in difficult times for homeowners so the President has introduced changes to the mortgage loan modification process that will help homeowners restructure their mortgages. This is indeed good news in troubled times.
The Making Home Affordable loan modification program began on March 4, 2009. There are two parts to this new plan. First it lets over 4 million homeowners get their loan refinanced. Second, it loosens previously tight guidelines on home loan modifications.
Numerous Americans, facing the realities of the current economic downturn, are facing foreclosure or are finding it difficult to pay off their mortgage. Many Americans are facing lay offs or have to take pay cuts. Naturally, if gross income decreases, the percentage of income that a mortgage takes increases to a point where it cannot be managed. The new plan will allow eligible homeowners loan modifications that reduce their mortgage payments to 31% of their income.
The reduced mortgage payment must remain the same for five years and after that it can be gradually raised until the loan returns to where it was before modification. Homeowners do not have to wait until they are behind in their payments to apply for a home loan modification.
There is an extra incentive for homeowners. Every on-time payment results in a payment to the principal on the loan. If a homeowner has a perfect record of payments for five years, they can have $1,000 per year applied to their mortgage. Lenders also receive bonuses to encourage them to work with homeowners and modify loans.
Every mortgage is not eligible for modification.
* The person living in the home must hold the mortgage
* Short-term investors and speculators cannot apply for modifications
* The borrower must prove the paperwork needed to prove his income
* The loan must have been negotiated before 2009
* A homeowner may only receive one modification
* All applications must be submitted before Dec. 31, 2012
* The loan must be insured by either Fannie Mae or Freddie Mac.
Borrowers can get a second chance at paying their mortgage loan thanks to the home loan modification program. Monthly payments can be reduced and homeowners can relax during these uncertain times.
For essential tips and facts about how to get approved for a Loan Modification, Visit our simple, no nonsense loan modification guide and resource: http://MortgageModificationLoan.net/
Article Source: UnArchived Articles
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