Obama Loan Modification Program-simplified

By Author: Alicia Pinder
Total Articles: 34
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The Obama loan modification program was introduced on 1st January, 2009 to help millions of American homeowners save their homes from the traumatic process of foreclosure. Even though the home loan modification plan aimed at rescuing homeowners from their difficult situation, not everyone benefits from the loan modification program because most often than not the home owned by an individual will be worth less than the mortgage amount owed and so chances of getting qualified for the Obama loan modification program is bleak for many such homeowners. The major brunt of the recent economic downturn has been faced by the real estate industry and millions of American homeowners who suddenly found themselves on the verge of being homeless and facing property foreclosures. The Obama administration launched the special loan modification plan officially called as HAMP (Home Affordable Modification Program) but widely known as Obama Loan Modification Program to help those families struggling with mortgages and save them from foreclosures.

Below is an attempt to simplify the key eligibility criteria to avail this loan modification ...
... process. To be eligible for Obama loan modification you must belong to the following category as a homeowner:

• The total cost of your monthly housing dues which includes your mortgages, taxes, Association fees, Insurance etc. should be more than thirty one percent of your average monthly gross income. Below is an illustration of the same

Illustration:
Your monthly housing cost (including taxes, mortgage, Insurance etc.) = $1200
Your Monthly gross income = $3000

Percentage = (1200/3000) * 100 = 40 %

Here the percentage comes out to be forty percent hence you would be eligible for HAMP if you qualify other conditions too.

• The loan originated before 2009. That is your loan closed before January 1st, 2009.
• The property in question must be your principle residence. ie. It must be the property on which you currently reside.
• The property must have 4 units or less. Larger properties (having 5 units or more) are not eligible for Obama loan modification.
• There must be undeniable financial hardship being experienced by the home owner. ie. There must be clear financial difficulty in meeting the financial burden of the housing cost. This could be due to any reason like loss job or sudden increase in expenses due to health reasons etc.
• Your balance principal of the mortgage should be below $729,750.

Through this loan modification process your monthly installment may come down to a more affordable and financially acceptable limit, so that you can still afford to stay on in your own house. This can either be done by increasing your loan period or decreasing the rate of interest as negotiated with your lender. But, you must remember that most of the banks and financial institutions providing this loan modification program voluntarily. Hence the onus of getting the loan modification and to the terms and conditions according to your suiting lies with you. Loan modification is a complicated process and involves multiple players and process, but there are various loan modification companies, many of them present online over the net to guide you, help you with your applications and to negotiate on behalf of you.

Refinanceitt.com provides authentic information on hamp loan modification and offer suggestions on loan modification guidelines to the borrowers.