Obama's Home Affordable Plan

President Obama's new Federal plan, called Home Affordable, to help homeowners facing trouble to repay their mortgages contains two options. One of them is refinancing and the other is loan modification. You may choose your plan depending on
the following details of the plan.
The Refinancing option of Home Affordable is meant for those who are continuing to pay their mortgage but could not obtain refinance due to fall in the market value of their homes. This refinancing is subsidized by the government, covers a period of 15 to 30 years. The current market rate and cost of closing are taken into consideration for this plan. You will get the benefit of this plan if you satisfy the conditions given below :

1. You must not have defaulted for more than 30 days in the past one year.
2. You must be using the home as your primary residence.
3. You have owned the loan from Freddie Mac or Fannie Mae.
4. The amount due must not exceed 105% of the value of your home.
5. You have to submit income proof that you can bear the new mortgage payment
6. Only first trust deeds are covered by this plan. In case of second, the secondary lender must accept the renegotiated loan agreement of the first deed.
You must consider the fact that if your existing mortgage provides for negative amortization by applying a significantly lower rate or if you are paying the interest only, the renegotiated amount may go up. This plan aims to provide the troubled homeowners a loan bearing fixed interest rate.
The second alternative of Home Affordable plan concerning loan modification requires you to satisfy the below mentioned conditions :
1. You may not have obtained the mortgage from Freddie Mac or Fannie Mae.
2. The home must be used by you as primary residence.
3. Your principal amount due must not exceed $729,750 if the home has one residential unit. The ceiling goes up if it
has more than one dwelling units.
4. You must have taken the loan before 1st January. 2009.
5. Your existing repayment payment along with all taxes and insurance must be more than 31% of your gross monthly income.
6. You have to prove that you are facing financial trouble.
If you satisfy all the above conditions you have a bright chance of qualify for this plan. As the second option gives the lender incentive from Treasury Department it is preferred by them. If you have not actually defaulted, you have to prove that some financial crisis will prevent you from honoring your repayment commitment.
To secure a relief under Home Affordable you have to submit a properly filled in application and other financial documents in support of your claim. Delay in processing may be avoided by filling in the details in the application correctly and
exhaustively. As this is the basic document on which your lender will decide your case, take care and devote enough time for this. This program of loan modification offered by the Federal government may assist you to retain your home.

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