Do You Qualify For The Obama Loan Modification Plan?

The Obama loan modification plan was designed to help over four million homeowners affected by the recent real estate downturn. $75 billion in funding has been allocated and will go directly to homeowners to help them avoid foreclosure of their primary residence. Loan modifications, or mortgage modifications, allow homeowners to see a massive reduction in their interest rate, principal and term of their mortgage.
Federal Home Affordable Refinancing (HARP Program)
One form of the mortgage modification plan is the HARP Program. This intended to help homeowners who want to refinance a mortgage but cannot because the value of their home has decreased substantially due to the recession.
HARP Plan Requirements:
- This is for mortgages owned or guaranteed by Fannie Mae or Freddie Mac
- The balance of your mortgage cannot exceed 125% of your homes value
- Mortgage payments must not be more than 30 days late in the last 12 months
- You have enough income to pay back the new monthly mortgage payment
- By modifying your loan, your current mortgage will become more affordable and maintain stability over the term of the agreement
Federal Home Affordable Modification (HAMP Program)
The other form of the mortgage modification plan is the HAMP Program. This program helps homeowners who have incurred financial hardship including loss of a job, loss of household income by either party, or the death of a spouse. The plan allows your home mortgage to be altered without having to refinance.
HAMP Plan Requirements:
- The property in question must be your primary residence
- More than 31% of your gross monthly pre-tax income is going toward your mortgage payment
- Due to a financial hardship you cannot afford your current monthly mortgage payment
- Your mortgage commenced prior to January 1, 2009
- Cannot be a jumbo loan (i.e. balance must be under $729,750 for a single family residence, $934,200 for a duplex, $1,129,250 for a triplex, and $1,403,400 for a 4 unit home)
It is imperative to consult with a professional who is familiar with these programs and can direct you according to your individual situation. There should be no cost for initial consultations. Be sure to perform your due diligence and ask for written testimonials and a proven track record for success. If these steps are followed, many individuals and families will benefit from the Obama loan modification plan.

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