President Obama's Making Home Affordable loan modification plan looking for support up to 5 million homeowners facing the chance of losing their homes due to high-priced home loans.
Online PR News – 12-October-2010 – – The Loan modification program is financed with $75 billion dollars as well as it offers a unique aspect that pays lenders, servicers as well as borrowers to contribute in the loan workout program. So far, only a little over $1 billion has been utilized, so there is still plenty of support to facilitate at-risk homeowners through a loan workout. Here are some details on the programs main features and who would qualify for this loan modification program called Home Affordable MP for short.
Minimum criterion for availing Making Home Affordable loan modification:
• main residences only & 1 to 4 unit properties only
• due principal balances to equal $729,750 or less (higher for two to four unit properties)
• Loan must have been originated prior to January 1, 2009
• Current mortgage payment (including taxes, insurance and Homeowners Association if applicable) must equal more than 31% of the borrowers gross monthly income
• Borrowers are not required to be delinquent on their payments to participate
• Borrowers may not be in bankruptcy
The plan is free, and the Treasury Department is caution homeowners against paying anybody a fee to contribute in the loan process plan. Obama's loan modification program-HAMP- calls for a lessening of the mortgage payment to equal 31% of the homeowner's gross monthly earnings, to be arrived at by:
1. Interest rate reduction to as low as 2%
2. Longer loan term to forty years
3. Principal forbearance
4. primary amount forgiveness (not compulsory and at lenders diplomacy)
5. Second loans are now qualified for modification with this program
A Pay-For-Success characteristic allows for lenders along with servicers to be paid incentives and offer additional inducements to proffer this plan to their borrowers. Homeowners who preserve the new customized loan payments would be given up to $5000 in principal decrease to their present loan to assist restructure equity.
Concerned homeowners can find out if they might get eligible for this Obama loan modification plan through calculating their debt ratio as well as determining if it is achievable to reach their target payment depending up on 31% of their gross monthly earnings using the alternatives mentioned above. Do you know how to calculate your debt ratio to pre-qualify yourself prior to you contact your lender to apply? Take benefit of a software program intended just for homeowners that take off the formula for HAMP approval. Just input your own income and expenses and the calculations are completed automatically.