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Molly Villa

Bio Statement Home Loan Modification Plan - Get Help Today

President Barrack Obama has recently been elected as President of the United States, which is considered the most powerful position in the world. He also made history by being the first black president of the United States. He launched several development programs, one of them being a home loan modification plan, which is called "Making Home Affordable". The U.S. Treasury broke the news about this housing plan that embraces a program for loan modification to aid homeowners who cannot afford to pay their mortgage and a refinancing program that assists homeowners who have very little or totally no equity in their homes. This program has a purpose of helping borrowers who are in the brink of default or receiving foreclosure for loss of income or sudden rise of home expenses (e.g. not being able to pay for mortgage).

So, who qualifies for a home loan modification plan? This program is open to homeowners who have proof that they really are incapable of paying their mortgage due to financial problems. This goes for the borrowers who either missed paying their mortgage and those who are about to miss it. However, it is only available to those who have acquired mortgage before Jan. 1, 2009 and stated the home as their primary residence. They should also present tax returns and paycheck stubs to record their income.

So how does this program help? The home loan modification plan gives incentives to persuade lenders and loan providers to help the borrowers through modification of their loans. However, one must remember that it is not a refund; rather it is a change in the loaning terms.

Let me give you a brief description of how this program works. First of all, the borrower should first find out if he is qualified for the loan modification plan. Once he determines if he is eligible for the loan, the lender will then decrease the interest rate of the mortgage so that the monthly payment will be reduced to 38% of his income. The lender will cut the interest more and make it reach up to 31% of the income. The cost of the reduction will then be assigned to both the lender and the government. Or the lender of tax refund advances may just lessen the payments of the borrower by diminishing the borrower's debt, which can then lead to extension of the term for over 40 years. He may also opt to restructure the loan to eliminate the interest that is usually charged on the load balance. In addition to this, the federal government can also give $1,000 every year to the borrowers that would be included in their mortgage if they constantly pay even after the loan modification. This kind of plan may last normally for five years. After that term, the rate may be increased. Other types of modifications may either last for five years or remain permanent, depending on the financial capabilities of the borrower.

If you find that you do not qualify for this home plan, you may go with the refinancing program. This program is available to several homeowners who have solid mortgage payments or those that have mortgages owned by Fannie Mae and Freddie Mac.

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