Saturday, April 11, 2009

High hopes from Obama's Home Loan Modification Program:

President Obama announced the details of the new home loan modification program around a couple of months ago which showed a lot of hopes and potential. The plan is designed so as to help around 9 million homeowners modify or refinance their existing mortgage loan program. This program, named "$75 billion Homeowner Affordability and Stability Plan", induced high hopes amongst the numerous homeowners. Particularly those homeowners, who were about to lose their homes to foreclosure, could actually breathe a sigh of relief. Thanks to Mr.Barrack Obama.

With this program, loan modification has become much more attainable and real hope is finally here. The plan aims at reaching out to 3 to 4 million households in US who are in need between 2009 and December 2012. This plan was designed as a consequence of the rapidly increasing number of Americans unable to pay their mortgage payments. However there are many requirements that has to be fulfilled to be eligible for the program.

The following are some of the general guidelines:

  1. The home must be your primary residence.
  2. You must able to show proof of your income.
  3. Your monthly payment must be more than around 38% of your gross monthly income.
  4. This program is not available on second mortgage.
  5. Your current mortgage was originated before Jan 01,2009.

If you can fulfill the needed requirements and prove your financial hardship, you can qualify for the program. Lenders are also happy to accept the plan due to fact that homeowners are really in hardship. Moreover, for a successful modification program, they can get around $1,000 each year for 3 years.

So all in all, this is a standardized program for both the homeowners as well as the lenders. Also there is no negotiation problem involved, either you qualify or you don't. You can save thousands by following some simple steps.


  1. The most common mortgage modifications are listed below:

    lowering the mortgage interest rate
    reducing the mortgage principal balance
    fixing adjustable interest rates within the mortgage
    increasing the loan term throughout the mortgage
    forgiveness of payment defaults and fees
    or any combination of the above

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  2. Thanks a lot for sharing the list.

  3. I just refinanced. Got in at 4.75% Very happy. BOA did come out and say that they think we can see the 30-year mortgage rate drops to 4.25% by end of year though. Oh well, at 4.75%, it still saves me hundreds a month.

  4. I believe "Obama's Home Loan Modification Program" could solve some of the urgent problem facing house buyers.

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