Federal Stimulus Plan – Loan Modification Programs

Homeowners stuck with a high interest rate home loan or facing a financial hardship

and no longer able to afford their mortgage may qualify for a federal loan modification program that will offer a low, affordable payment. The Treasury Department is offering $75 billion in incentives to lenders who agree to standard terms and conditions when modifying homeowners bad loans.

- Pre approval

The goal of the Obama federal stimulus loan modification plan is to halt foreclosures and provide affordable Payments borrowers can stay in their homes. Most of the toxic loans are exotic products, such as understanding the negative amortization loans, which were often sold, but difficult for the average homeowners. Falling house prices combined with increasing loan balances have to be a deadly combination. Understandably, the lenders from obtaining these ticking time bombs in front of the books from the customer a loan workout.

- Pre approval

There are some basic qualifications for a federalsponsored loan modification:

Primary residence only

Loan amount less than $ 729,750

Current payment equivalent to more than 31% of monthly gross income

Loans taken out before 1 January 2009

Homeowners, where a financial hardship situation.

Principal residence means that you reside in this house as your primary residence. Duplex and Fourplex units may have high loan balances of this program. The new addresses to make the payment equivalent to just under 31% this meansthat the total housing debt, including principle and interest, taxes and insurance and HOA if applicable will equal just 31% of the gross monthly income as stated.

The benefits of the federal loan modification plan include:

Interest rate reduced to as low as 2%

Loan term extended to 40 years

Possible principal reduction or forbearance

Late fees and penalties waived

Loan brought current

Second liens eligible for interest rate of 1%, or debt may be retired Total

http://www.preapproval.pannipa.com/2009/10/02/federal-stimulus-plan-loan-modification-programs/

Federal Stimulus Plan Loan Modification Programs

By: Gordon

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