How to Get a Mortgage Loan Modification Under Obama's Federal Plan Guidelines

By: Lindsy Emery


Many homeowners like, you may be eligible for a mortgage loan modification with Obama's federal plan. Most lending institutions are ready to process applications for this program, which features an aggressive loan workaround, including powerful incentives for your vendor to approve your application. Before you call or write your lender, be sure, you know the tricks to improve your chances for approval.

$75 billion are allocated to this program, and roughly 5 million American homeowners are estimated to apply for relief. Below are some important and useful tips to help you qualify for a lower monthly payment.

This new federal mortgage loan modification plan is designed to qualify as many eligible homeowners as possible. The program standards and requirements in order to be approved are very straightforward. The secret to success is to have a solid grounding in how to prepare properly, so that your application has the best possible chance of complying with the guidelines. Here are the qualification basics:

-- your mortgage must have originated before January 1, 2009;
-- the amount of your loan must be under $729,750 (two to four units have a higher allowance).
-- the mortgage you are applying for must be for your primary residence;
-- your current payment must be over 31% of your gross monthly income (including any taxes, insurance, and homeowner dues).
-- only first trust deeds are eligible (second loans are not).

If you qualify under these terms, your chances for the Obama federal mortgage loan modification program are very good. While this federal program is voluntary, most lending institutions are taking part in it. Since vendors are paid an incentive for each completed modification under this program, there is a high level of interest. Also, homeowners who succeed in meeting their new terms will receive bonus payments of up to $1000 per year, for as long as five years. In order to help recapture lost equity, these bonus payments get deducted directly from the principal balance on the loan.

Applicants for the mortgage loan modification plan will need to complete the lender's application, and must provide documentation of their income. A convincing financial hardship letter is also an important piece of the package. A statement of current expenses is required as well. The way that you complete the forms, has a direct influence on whether you get a new lower payment. So it is important to take your time, ask any questions that you may have, and complete the application and all paperwork as thoroughly as possible.

Homeowners who qualify will have their mortgage loan payments reduced to a new level equal to 31% of gross monthly income. Furthermore, the interest rate may be reduced to as low as 2%, the repayment term may be lengthened to as long as 40 years, and again, some principal may be deferred.

These federal terms are among the most aggressive mortgage loan modification options available today. They were designed to provide homeowners with a sustainable, affordable monthly payment during the current economic crisis. To apply for this plan, learn how to complete your loan modification application forms. In order to maximize your odds of being approved, study the forms carefully and ask any questions, no matter how trivial they may seem. For many homeowners, this is their second chance to avoid foreclosure and keep their homes. So diligent preparation, before you contact your lending bank, could make all the difference.

Article Directory: http://www.articletrunk.com

| More

For essential tips and facts about how to get approved for a Mortgage Loan Modification - visit my simple, no nonsense loan modification guide and resource: Home-Loan-Modifications.info

Please Rate this Article

 

Not yet Rated

Click the XML Icon Above to Receive Finance Articles Articles Via RSS!


Powered by Article Dashboard