| While the economic downturn has hit many | | | | reduced rate for at least five years. At that time, the |
| homeowners hard, the President's home mortgage | | | | mortgage payment may be raised incrementally to the |
| loan modifications program is here to restructure many | | | | loan rate in place when the loan was modified. |
| mortgages. This is a cause for many to celebrate their | | | | Homeowners need not be behind in their monthly |
| good fortune. | | | | mortgage payments to be eligible. |
| The Making Home Affordable loan modification | | | | Mortgage borrowers who use the plan receive an |
| program was enacted on March 4, 2009. There are | | | | extra incentive as well. Each timely payment means |
| two parts to the restructuring. First, it allows 4 to 5 | | | | they receive relief from the balance due on their |
| million borrowers to qualify for refinancing. Second, it | | | | principal. Thus, a borrower who meets the mortgage |
| creates more permissive guidelines for home loan | | | | for 60 months is eligible for up to $1,000 per year. |
| modifications. | | | | Likewise, lending institutions receive incentive payments |
| Countless Americans, stressed by the current | | | | for modifying their existing loans. |
| economic realities, face foreclosure or increased | | | | Not all mortgage loans are eligible. Qualifying loans are |
| problems in meeting the terms of their mortgage. An | | | | for owner-occupied homes. Thus, no short-term |
| increasing number of Americans are laid off, are | | | | investors or speculators will qualify. Also, the borrower |
| suffering cuts in pay, and so forth, as their total | | | | needs to supply gross income documentation, and the |
| percentage of income needed to make monthly | | | | loan must have originated prior to 2009. Each qualifying |
| payments increases beyond the point of | | | | borrower is only eligible once. The deadline for loan |
| reasonableness. The new plan grants qualifying | | | | modification is 12/31/2012. And finally, this plan provides |
| homeowners loan modifications that cut their mortgage | | | | relief only to borrowers with loand covered by Fannie |
| to 31% of gross monthly income. | | | | Mae and Freddie Mac. |
| Reduced mortgage payments are to be held at the | | | | |