The Obama Loan Modification Program for Making Home Affordable
The bursting of the real estate bubble in 2008, lead to an unprecedented mortgage crisis across the United States. This resulted in number of homes getting foreclosed because of their values having declined. Homeowners started owing more on their home than its actual worth and this prompted the Obama administration to take certain vital steps. To stabilize the plunging housing market and the national economy at large, President Obama announced the “Making Home Affordable” program or the MHA plan in the February of 2009. The MHA schedule was formulated to assist financially struggling homemakers in reducing the current levels of their mortgage debts and to make monthly payments more manageable as well as sustainable over the long run. To make these possible, financial grants worth $ 75 billion were provided. A variety of options were provided to borrowers for helping them to keep their at-risk homes for years to come with affordable monthly payments, the most popular among them being home mortgage modifications and refinancing. Almost 8 to 9 million homemakers across America were estimated to be financially helped when the Obama stimulus plan was initiated.
The federal government initiated the Obama loan modification plan to assist millions of underwater American homeowners in reducing the existing level of monthly mortgage payments substantially. The program allows borrowers to get access to the lowest rates of interests in the mortgage industry at the best possible terms and conditions. Nevertheless, funds offered for mortgage relief assistance were not to be construed as a gift from the government of the United States, one needed to qualify to get benefited with the help granted. But first probable applicants must know what exactly loan modifications mean and how to qualify for one that works well for their situation. Keep reading more…….
What is a home mortgage loan modification?
A loan modification could be best described as a process through which homeowners could try and get the terms of their current mortgage loans modified so that the monthly installments become more affordable as well as sustainable. In a typical process for modifying your present home mortgage loan, your mortgage servicer will act to undertake any of the following propositions for lowering your monthly payments.
- Lower mortgage interest rate
- Extend duration of home loan
- Offer reduction in unpaid principal
However, to qualify for a home mortgage modification, an applicant must adhere to certain qualification criteria. That’s where the Obama mortgage stimulus plan steps in. It seeks to standardize the eligibility and approval procedures which apply to various home loan modification programs and these have to be strictly followed by both borrowers as well as lenders. Therefore, the basic step to start with the process of getting your home mortgages modified will begin with determining your qualification to receive federal grants.
A complex set of rules and regulations are in place to regulate the mortgage modification procedure. Sometimes, even young legal professionals find it hard to understand and interpret these. To have a fair understanding of the eligibility guidelines you will need to seek help from a competent professional who has dealt with such cases for quite some time. Unfortunately, many homeowners do not realize the need to take advantage of expert help and as result, their applications get denied as they fail to satisfy some or the other criterion which is stipulated by the Obama loan modification qualifications framework.
Qualifying for a mortgage modification with the government program is not easy but you may do yourself some justice by checking out if you meet few basic conditions that are mentioned below:
- You must be a primary resident in the home for which mortgages are to be modified.
- Your present home mortgage should have originated on or before 1st of January, 2009.
- You have to owe a principal unpaid loan balance less than $729,750 on your family home.
- You need to be delinquent on monthly payments or must be faced with probability of lagging behind in near future.
- Your financial hardship situation has to be clearly foreseeable and must be well documented to convince your lender.
- You must be able to show that you have enough and stable monthly income to pay the modified monthly installments.
These are only to mention a few, there may be more such loan modification requirements which borrowers need to meet. Besides, after having determined your qualification, to enhance your chances of getting qualified for government finance relief, it could be important for you to prepare and furnish correct as well as accurate documentation along with your request. Only a competent mortgage specialist who has experience of dealing with the Obama mortgage modification process can prove to be a good guide. By seeking guidance from an expert, you will learn how to get loan modification application approved.