The Treasury Department is funding Obama’s Stimulus Plan Loan Modification program to encourage banks to offer loan workouts to borrowers facing financial hardship situations. The goal is to keep homeowners out of foreclosure and encourage them to keep making mortgage payments. Can this program help you? Here’s how it works.
How to Apply: Obama has mandated that every homeowner who requests the Home Affordable Modification Plan must be considered. This means that even if you have applied with your lender previously and been turned down, you can re-apply under this Federal plan. During the review process, any foreclosure proceedings will be halted until an eligibility determination is made. So, you can call your banks Loss Mitigation Department and say, “I want to apply for the Home Affordable Modification Plan”.
CAUTION: Do NOT give your bank any of your financial information until you have taken the time to prepare your loan modification forms and have fine tuned your application. This is critical to success-you need to be prepared and have all of your information in front of you so that you don’t make any mistakes.
Obama’s Stimulus Plan Features: The program has one goal-to provide you with an affordable and sustainable mortgage payment so you can stay in your home. There is a standard method of determining if you qualify:
- Do you live in the home as your primary residence?
- Was your loan taken out before January 1, 2009?
- Is your loan amount less than $729,750? (for 1 unit properties-higher for 2-4 units)
- Is your current payment more than 31% of your gross monthly income? (including your property taxes, homeowners insurance and any homeowners dues)
- Are you facing a financial hardship situation?
If you can meet all of these basic criteria, then you are a good candidate for help. The next step is to prepare your actual application forms-this is the important part. You must take the time to work on your financials and adjust your budget so that you fit into the approval guidelines. This is a simple process and not hard to do when you follow step by step directions provided in a homeowner guide.