Obamas Home Loan Modification Plan Do You Qualify?
Obama’s home loan modification plan is officially named the MHA Plan, or Making Home Affordable Plan. This home loan modification plan is expected to help 9 million American families stay in their home. Want to know if you qualify for this new plan? Learning about the qualifications of the MHA plan is the first step towards approval.
First things first, to qualify for Obama’s home loan modification plan, your mortgage must be insured by either Freddie Mac or Fannie Mae. Currently, only these types of loans are eligible for the MHA plan. Also, the home must be your primary residence.
Once you’ve met these two requirements, Obama’s home loan modification plan gives you choices. You may either refinance or modify your current mortgage. Homeowner’s who are current on their mortgage payments and have a loan balance less than 105% of the current value of the home are eligible for a refinance. If you have fallen behind on any payments, refinancing is not the route for you.
Do not lose hope. Obama’s home loan modification plan also provides for those who are experiencing financial difficulties and have fallen behind on their mortgage payments. A loan modification under the MHA plan is open to both those who are current on their payments and those who have missed a few payments. You must own the home as your primary residence and have a monthly payment which is greater than 31% of your gross monthly income.
Obama’s home loan modification plan is geared towards at-risk borrowers in danger of losing their homes. Help is given by adjusting various loan terms to make the monthly mortgage payment more affordable. What is considered affordable? By using a debt-to-income ratio, or DTI, lenders can compute a new monthly mortgage payment that does not exceed 31% of a borrower’s gross monthly income. Once the new payment is determined, the lender must then adjust various loan terms to arrive at that payment. A lender will first reduce the interest rate of the loan to as low as 2% to try to arrive at a 38% DTI threshold. If 38% cannot be reached by the interest rate alone, the lender can extend the term of the loan up to 40 years, or they can forbear principal on the loan. Once the 38% is reached, the lender and the Treasury will institute a dollar per dollar matching program to adjust the rate even more and bring the new monthly payment to the 31% DTI limit.
Once a loan modification is achieved, borrowers have a “trial run” of three months to ensure that the new payment and loan terms are realistic. After three months of on-time payments the new mortgage terms will be fixed for five years.
Obama’s home loan modification plan and the MHA plan is intended to stop the tide of foreclosures affecting the US economy and keep millions of American homeowners in their home.
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I qualified for the program and my lender participated yet, my lender disapproved it because the investors of the loan did not participate. I never heard of such non-sense in my life. I tried contacting my lender 3 times to go thru them for this program but they never returned my e-mails or phone calls. So, I tried a different source (attorneys and funding organization) and paid $3000.00 who processed and worked with my lender (CitiMortgage). CitiMortgage wants me to go thru them for some “Work Around” program they claim to have but the interest rate may be higher than the funding organization had got them to agree to. I’m so upset because I’m struck with a high mortgage and no one can help me get a 30-year fixed rate, even though I have excellent credit, just my house is upside-down by about $80K. I thought the Obama Administration could help us since we had an interest-only loan, etc. I guess not; I’ll probably end up like most Americans in foreclosure losing my home. I’m just hoping that Citimortgage will decide to work something out with the funding organization that I paid. Citimortgage has not been very cooperative with me or anyone that I know.
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[...] #4: Find out more about cash incentives. Also incorporated under Obama’s loan modification plan are cash incentives to encourage participation. Servicers and borrowers are both entitled to cash [...]
I am a single indiviual that is currently out-of-work. I purchased my house here in Texas in December of 2007. My house payment went up $200.00 since. The original homebuilder went out of business and another came in and started building lower priced homes. I filed for the loan modification in 07/2009 and was also layed off. I have been getting the run around from Chase. Now they are telling me that my loan is FHA and they a not funding this program. I thought it was for people in need. They are also telling me that my un-employment is not considered income. All I have is a small retirement from one of my jobs. Is there anyone that can help me?
I tried to work with my mortgage company (Natinal City) and they disapproved me for the loan modification program. I am now thinking about paying the $3,000 to a company with a Home Savers Program. I cannot afford to pay $3,000, so I was wondering if these “types” of program are successful or not. Has anyone had success working with private organizations to get their loan modified? Has anyone had success with the “Complete Loan Modification Kit” mention on this website, as a recommended source?