President Obamas Loan Modification Plan
Im sure have probably heard about the recent additional spending plan from Washington of over 275 Billion Dollars directed toward assisting home owners to possibly stay in their homes. In an attempt to understand and find clarity in all of this fog we have summarized the highlights as follows: There has
been 275 Billion dollars set aside to assist homeowners who need financial assistance in this current economy meltdown. Washington's hope is to assist
approximately over 10 million households.
Qualifications are very simple:
1.) The Home must be a owner occupied, primary
residence. This must be documented by a credit
report.
2.) There must be a documented hardship involved.
3.) The existing home loan cannot exceed $729,750.
4.) The Bank will be offered some incentives for several
factors, after the loan has remained current
for three months, the lender will receive
$1,000. Additionally, the lender will receive
$1,000 for each year that the borrower remains
current for up to 3 years.
5.) The Homeowner can possibly receive a $1,000 cash amount
to be used toward the reduction in Principle
amount for up to five years if he remains
current on his mortgage.
6.) The target amount for the lender to aim for
in reducing the payment amount is 31% of
Gross income for Housing. PITI. This is
to be accomplished by first, reducing the
interest rate to as low as 2 %. If this does
not accomplish the desired ratio, the lien holder
is to extend the term up to 40 years on the mortgage.
If the objective is still not achieved, the lienholder
is to Forbear enough principle amount at 0%
interest to accomplish the desired threshold.
7.) The Bankruptcy judges have been given the
ability to order the lienholders to reduce
the principle balance to make the budget of
the individual conform.