Obama's Loan Modification Plan

The US Government’s plan to help homeowner’s avoid foreclosure is popularly called Obama’s Loan Modification Plan. It’s more formally known as the Homeowner Affordability and Stability Plan (HASP) and budget allotted for this plan is $75 billion. There are two parts of this proposal.

Should I Refinance or get Home Loan Modification?

Home Affordable Refinance Program: The value of many homes has depreciated and consequently the current loan to value ratio has exceeded the refinancing normal mark of 80%. It is because of this that many homeowners cannot refinance their homes. The Home Affordable Refinance Program has been designed for these kinds of homeowners. The current loan in this case of mortgage loan modification should be owned by either Freddie Mac or Fannie Mae.

Home Affordable Modification Program: There are people whose houses are on the verge of foreclosure and need to modify their loans for reducing their monthly payment. The Home Affordable Modification Program is designed to help these people. In this case the current loan need not be owned by Freddie Mac or Fannie Mae.

The Advantages of Obama's Government Loan Modification are as follows

• The monthly payment is reduced and cannot be higher than 31% of the gross income
• The applicable rate of interest can go down to as low as 2%
• The duration of repaying the loan can be prolonged to as many as 40 years
• The borrower can get an incentive of reduction of the loan amount to the tune of $1000 yearly subject to the monthly payments of five years being regular
• The Lenders and the service providers can also avail monetary incentives for facilitating the borrowers

Qualification For Obama Loan Modification Plan Explained

The eligibility criteria to avail Obama's Loan Modification Plan are as follows.

• The current mortgage should be the first mortgage
• The current mortgage should have commenced on or prior to January 1, 2009
• The property should be the current primary residence of the borrower
• The property should neither be for the purpose of investment nor condemned
• The borrower should be able to justify and prove that without the help of Obama's Loan Modification Plan, the future monthly payments of the current loan will not be possible.
• The pending dues of the current loan should not exceed $729,750. This amount is subject to the number of units in the property.
• The second mortgage is not eligible for the Obama loan modification plan
• The last day for being eligible for this plan is December 31, 2012
• It is better if the current loan is sourced from Fannie Mae or Freddie Mac
• The applicant has to submit two latest pay stubs, the latest tax returns and an "affidavit of financial hardship".

Obama Loan Modification For Averting Foreclosure

The Obama loan modification program has been designed to stop foreclosure and bring some relief to the debt stricken home owners. Some of the steps towards availing Obama loan modification and stopping foreclosure are as follows.

• The first step is to complete our form so we can learn more to help you and contact us for our services pertaining to Obama loan modification program
• We are part of a team of professionals aiming for 100% customer satisfaction. . Our aim is to qualify you for the Obama home loan modification program.
• Don’t stop making your monthly payments if at all possible.

The last step of this Obama Home Affordable Modification is followed by a drastic reduction in your monthly payments not to exceed 31% of your income allowing you to make your mortgage affordable once again.