Obama’s Loan Modification Program – Top 10 Questions

With President Barack Obama’s loan modification program, the Homeowner Affordability and Stability Plan over 7 million homeowners facing foreclosure will be helped. This $75 billion dollar program provides financial incentives to lenders and borrowers to modify their loans and save millions of families homes. There are many questions that we come across daily and have provided you here with the 10 most frequently asked questions.

[View with PicLens]

1. What if I am already facing foreclosure?

If you are already facing foreclosure a loan modification is a great way to stop the foreclosure process. Obama’s loan modification program provides incentives for people in the foreclosure process and those not in it to modify their loans. Every application is reviewed by the lender individually and must meet certain guidelines.

2. How much does a loan modification cost?

A loan modification is free! Many 3^rd party companies charge fees in excess of $1500-$3000 and most of them are scams. Your best approach to getting a loan modification is to get educated, purchase an inexpensive do it yourself loan modification kit and apply yourself.

3. I have already applied for a loan modification can I still get a piece of the $75 billion?

Since there is financial incentives in the program for both the lender and the borrower, your lender will be more than willing to consider you under Obama’s loan modification program as long as you meet its guidelines and they are participating in it.

4. What do I have to provide my lender to determine if I qualify for Obama’s loan modification program?

If you have answered yes to the 5 questions on the home page then there is a good chance you will qualify. Your lender will require you to provide paycheck stubs, tax returns, complete income/expense forms and a financial hardship letter. Again, the loan modification kit could prove usefull with its sample financial statements and hardship letter templates. You can also get the free hardship letter template available on here at www.obama-loanmodification.com.

5. What if I am not delinquent on my mortgage?

With Obama’s loan modification plan you do not need to be behind on your mortgage to qualify. However, it is critical that you demonstrate that due to a financial hardship you will not be able to continue making your payments and that it is in the lender and your best interest to receive a modification.

6. Who will qualify for The Homeowner Affordability and Stability Plan loan modification?

There are 5 basic questions that you need to answer yes to, to determine if you qualify:

1. Do you live in the home?
2. Is your current loan amount within the Fannie Mae conforming limits ($625,500 in high cost areas and for other areas it is $417,000)
3. Are your current house payments more than 31% of your gross income?(Loan modification kits can help with all financial calculation your lender may want to see)
4. Are you must be able to prove you have current income?
5. Do you currently have a job?

7. Is my lender required to modify my loan?

No, with the loan modification program participation by companies is optional. However, many of the large companies have agreed to participate since there are financial incentives for both the lender and the borrower.

8. What if my house is worth less than I owe, can I still get help?

In Obamas loan modification plan there are provisions that can reduce the principal balance. This decision will be up to the discretion of the lender, however there is hope that you will be able to reduce your mortgage.

9. What if my loan is owned or serviced by Fannie Mae or Freddie Mac?

Freddie and Fannie are both participating the Homeowner Affordability and Stability plan and if you meet their requirements then you will likely be eligible for a loan modification.

10. Where do I apply for a loan modification under the Homeowner Affordability and Stability Plan?

You can apply at your lender. The first step in the process is gathering the required information that they will be looking for, writing a hardship letter and then contacting them to establish a relationship and begin the process of getting your loan modified.

Many more questions have been asked and answered in the best resource we have found for doing the loan modification yourself, the Complete Loan Modification kit provides all the resources necessary to successfully receive a loan modification under President Obama’s loan modification program.