What Does Obama Loan Modification Plan Entails And How To Apply For It?

Can you get advantage from President Obama’s loan modification program? This plan is called as home affordable modification plan or HAMP in short. If anyone is stuck in an unaffordable mortgage and is facing financial hardship situation than he need to learn to apply and qualify for the government loan modification plan. Below given are the basic guidelines for approval and the terms which are entitled for eligible homeowners.

5 Basic guidelines for federal HAMP loan modification:

* The applicant should live in his home as a primary residence
* The loan should have been originated before January 1, 2009
* Loan amount should be less than $ 729,750 for a single unit home.
* The current mortgage payment should be equal or more than 31% of the monthly mortgage income which should include the taxes, insurance and the homeowner’s dues
* The servicer should be approved to offer this plan by the Treasury department of U.S.

Standard affordable home loan modification plan terms

* The new modified payment should be targeted to equal no more than the 31% of the gross monthly income.
* Reduction interest rate is as low as 2%
* Loan term is extended up to 40 years
* Interested homeowners need to contact the lenders and ask them to consider for the federal loan modification plan- HAMP. One will also be asked to submit an application which includes a hardship letter which explains the circumstances, a financial statement dealing with the expenses and income called a RMA, proof of income and pay check stubs are also needed.
* There is a standard 4 step formula which the lender uses to decide if one fit in his guideline and would be approved for a loan modification. One can use the software program which is used for the homeowners, one need to simply put the expense and income and the debt ratio, new target payment, disposable income, new interest rate etc are all figured automatically. You can save your hours of aggravation and assure to prepare the correct application in the first time itself.

One should assure to know and understand his approval guidelines and then prepare for the loan modification correctly. One has a single chance for approval thus completing the application and tuning the forms before sending them to the lenders will provide the best chance for success. One should avoid mistakes while applying for a loan modification.

This grand scheme of home loan modification plan is an excellent method for any homeowners who are struggling with their finances and want to change their monthly payments to save their home from foreclosure. It’s best to find a service which can help one throughout the process and act on his behalf while communicating with the banks and the lenders. Few people have both knowledge and experience which the normal individual lacks when the loan modification comes in scenario. Get help now and save your home from foreclosure!