If you are a homeowner who has missed a few mortgage payments and are now facing defaulting on your home loan there is some help. The Federal Government and President Obama have come up with two separate plans to help struggling homeowners. One of these is the Home Loan Modification stimulus plan. Here are the qualifications:

• The mortgage in question must have been signed on and closed before January 1st 2009.
• The homeowner must live in the home as a primary residence.
• The mortgage must have less than $729,500 due.
• A letter of “Financial Hardship” in your writing and signed by you is necessary.
• All income will be stringently verified using pay check stubs and tax returns.
• Homeowners with monthly debts that are 55% or more of their monthly income must agree and go to free credit counseling offered by the Government.
Here are some things that Banks and Mortgage Lenders can now offer:
• Home interest rates as low as 2% although homeowners should expect a general interest rate of around 4.5%
• Banks and mortgage lenders can only allow you to spend 31% of your monthly income on your mortgage payment.
• There are no fees or costs associated with refinancing or modification of a home loan. These costs are covered by the Government.
• A balloon payment may have to be added to the end of the mortgage term if the monthly payments have been too low. These balloon payments need to be paid off prior to another modification or refinance or when you sell the home.
• Homeowners can only modify their home loan one time using this stimulus housing bailout plan.
• Homeowners have an added incentive from the Government to make their new mortgage payments on time every month. For each year of successful and on time payments the Government will deduct $1000 off of your principal for up to 5 years or a maximum of $5000.
If you are up to date and current on your mortgage payments and your mortgage lender or bank will not approve you for a modification due to the property value dropping and now you owe more in principal than the home is worth. In this case, a government backed home refinancing plan may be helpful to you.

Here are some requirements for this Government backed home refinancing bailout program:

• The home must be you main residence
• You can not use cash from the new loan to pay off other debts.
• Your home loan must be financed or insured by Fannie Mae or Freddie Mac.
• You must make enough verifiable income to support the new mortgage debts.
• Interest rates will be set according to the average national home rates.
• You can pay off your home mortgage in either 15 or 30 years and the interest rate will remain fixed throughout the length of the home loan.
• The banks offer of a super low interest rate may be adjusted one time after 5 years have passed.

Also keep in mind that if you owe 5% or more on your mortgage than what your home is actually worth there is no help for you provided from the Government.
-M Petrone

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