People everywhere are struggling to stay in their homes during this housing crisis. People left and right are in danger of having their homes foreclosed on and many feel there are no other options.

Due to the high number of possible foreclosures there is a new Federal Loan Modification plan that has been put into place by the President. What this new modification plan which is funded by a $75 billion stimulus plan will do is help current homeowners modify their mortgage into more affordable monthly payments.

Common questions: Who are the people that will benefit? What are the qualifications on must meet in order to apply? Below are some answers to both of these questions.

·The home loan that you would want to modify must be for a primary residence. Second homes will not qualify.

·The loan in question can not be more than $729,750.

·The cause for the financial hardship must be out of the homeowners control like: unexpected medical problems, decrease in income, loss of job etc.

·The current home loan that the homeowner has must have become official and signed on or no later than January 1, 2009.

·The Federal government must also approve the lender of the loan.

·The homeowners’ mortgage loan must exceed 31% of their total monthly income. This total must include all taxes on the home, any homeowner association dues and homeowners’ insurance.

·The homeowner must also provide enough proof showing that they can and will honor the new modified loan and will commit to do so.

All potential borrowers must meet the above requirements and also provide the appropriate paperwork that is needed for the home loan modification process. Homeowners are allowed to apply for this loan modification plan only one time so it must be done correctly. It is recommended for borrowers to know all of the prerequisites that are needed and to completely fill out the paperwork needed prior to contacting their lender. It is possible to make mistakes that can cause it to be denied or delayed if done incorrectly.

When the application process is complete and if you are approved you can expect a monthly payment that will be less than 31% of your total monthly income. Your current loan can be decreased through different methods including lower interest rates, waiving late fees, longer loan term and in some cases forgiven principle. If you are one of many facing foreclosure don’t waste any more time, get out of that hole and apply for Obamas Loan modification plan. This plan is only in affect until December 31, 2012.

-M Petrone

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