President Obama’s loan modification program

Many homeowners will be thinking who will qualify for the President’s loan modification program in the current recession period? The Affordability and Stability Plan will allocate $75 billion dollars to help the borrowers and save them from possible foreclosure. The question is who will actually qualify for this program since it is not everyone and also because all the lenders are not participating in it.

The goal of the new home loan modification plan is to help 7 – 9 million borrowers stay in their homes. This program is voluntary and each lender will determine which borrower will actually qualify for this plan. The federal government will offer incentives to lenders who participate, but the final decision is up to the bank whether to participate in this plan or not. The homeowners will have to show certain documents and complete the loan modification forms that will be reviewed for eligibility. Here are some basic guidelines on how to qualify for the Affordability and Stability plan

You must live in the home as your primary residence
Not available on second mortgages
You must be able to prove your income
Your current house payment must equal 31% or more of your gross monthly income
You do not have to be delinquent to apply for this loan modification program
No charge to apply-Free loan modification program

Interested homeowners will start collecting the required paperwork and complete the necessary forms. Borrowers will have to prove their financial hardship, provide their income and expense details in order to be considered as a potential candidate for the mentioned plan.

The program is on a voluntary basis and the banks will decide whether to participate in it or not. Since the federal government is offering the incentives, so most banks are willing to offer this plan to the borrowers who qualify.

Successful borrowers will also be given a financial incentive for keeping their new modified loan current. The incentives will keep on increasing each month so that the borrowers do not default in the repayments, with a possible $5000 bonus that will be applied directly to their mortgage balance at the end of 5 years. The financially strapped borrowers can begin learning more about how to qualify in this plan and submit their paperwork for approval.