| The current economic downturn has badly crippled the | | | | monthly income. |
| housing market in general and the homeowners in | | | | To apply for these Mortgage Loan Modifications, you |
| particular. Home foreclosure is at an all-time high. The | | | | must meet certain qualification guidelines: |
| Obama Administration has included funding in the 2009 | | | | 1. Your home must be your primary residence. |
| Stimulus Package that attempts to address this in the | | | | 2. Your lender must be on the approved lender list and |
| form of Mortgage Loan Modifications. | | | | your loan must be backed by either Freddie Mac or |
| Approved banks are being encouraged through | | | | Fannie Mae. |
| financial incentives to rework existing loans to reduce | | | | 3. Your original mortgage had to have been originated |
| the monthly payments of troubled homeowners who | | | | on or before January 1, 2009, and the total amount |
| may face foreclosure. This is done through one or all | | | | cannot exceed $729,750. |
| of the following methods at their disposal under the | | | | 4. Your current house payment must be considered |
| Stimulus Package: | | | | unaffordable, and this means it is more than 31% of |
| · Reducing Interest rates, possibly as low as | | | | your gross monthly income. That payment figure |
| 2% for five years. At the end of five years, they will | | | | includes property tax, homeowners insurance, and any |
| probably begin to increase in 1% increments until the | | | | homeowner association dues. |
| current rate at the time of the loan modification is | | | | 5. You have to be able to document through the |
| reached. During those five years, you will receive | | | | appropriate paperwork that you have been subject to |
| $1,000 for each year you keep your loan current! | | | | financial hardship. This means that you had no control |
| · Lengthening the loan term to as long as 40 | | | | over the events that caused either a reduction of |
| years. | | | | income or an increase of expenses. |
| · Waiving late fees that may have | | | | You will have to convince your lender that you can |
| accumulated into a real problem. | | | | and will dependably meet the new monthly obligations. |
| · Possibly reducing the actual principal by a | | | | You must have a black and white budgetary picture |
| partial amount in order to arrive at the targeted | | | | proving this. |
| monthly payment of less than 31% of your gross | | | | |