The Treasury department has signed and agreement with CitiBanks servicer, CitiMortgage that would allow Citibank to offer a more affordable and aggressive home plan for their struggling borrowers. What this means is that the lenders offering the loans are able to accept loan applications for homeowners and also offer the lender some incentives for every loan they modify using their new plan. Not sure what this means or even how you can benefit from this?

Since this new agreement has been agreed upon by the lender and the Treasury Department, Citibank and Citimortgage they have to offer this federal plan to any and all homeowners who request consideration for the plan. This means that if you had applied for a loan and have already been turn down, you can have them review your case again to be reconsidered for the new federally subsidized plan.

Ask yourself these questions below to find out if you are a candidate for the new help plan:

1.Did you get your loan before January 1, 2009?

2.Do you live in your home as your primary residence?

3.Do you owe less than $729,750 on your mortgage?

4.Does your current monthly payment exceed 31% of your gross monthly income? (Including insurance, taxes and homeowners dues)

If you answered yes to the above questions, approach a lender regarding the affordable home plan. Not everyone will qualify for this plan, however if you meet the required guidelines and you can prove it, your current interest rate can be reduced to 2% for 40 years. What is trying to be achieved is an affordable monthly payment. The monthly payment should only be 31% of your monthly income. Since the Treasury Department is paying Citibank for every borrower they help they are much more motivated to help the borrower. On top of the better rates and lower payments, every homeowner that stays current on their modified home loan for 5 years will be paid $5000.

Homeowners are being encouraged by President Obama to work with the banks in order to keep their homes. However, before you contact Citibank or send in an application, make absolute sure that you have all the necessary paperwork so you have the best possible chance of being approved. Take some time to learn the process for loan modification so you can be as prepared as possible. Don’t take any chances learn everything you can about the loan modification process.

-M Petrone

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