Obama’s Federal Government Loan Modification Program - How Do I Know If I Qualify?

By Katelyn Tuttle
Tags:
One Comment

Share on Facebook

Since Obama has taken office, the government has set aside millions of dollars to assist struggling homeowners and make it possible for them to stay in their homes rather than losing them to foreclosure during these tough and uncertain economic times. Obama’s federal government loan modification program - do you qualify? Here are the basic requirements:

1. You must live in the house, and it must be your primary residence.
2. You must have taken out your loan before 2009.
3. You must be currently facing economic hardship or expect to face hardship in the near future. For example, have been notified that you will be laid off.
4. Must have provable income.
5. Your current mortgage payment must be more than 31% of your gross income each month.
6. Your loan amount must be less than $729, 750.00 for single-family residence.

If you meet the above basic requirements, chances are good you will qualify for Obama’s federal government loan modification program. What are the potential benefits of participating?

1. Reduced interest rate. It may go as low as 2%.
2. Extended loan terms.
3. Principal reduction.

If you do qualify for the government loan modification program and the above benefits would be helpful to your situation, it is important to know how the formulas the government or lenders will use.

1. They multiply the gross household income by 31%. This gives them the amount of the mortgage payment they are trying to reach.
2. They subtract the monthly fees for homeowner’s insurance, taxes, dues, and so forth. This provides the new interest and principal amounts.
3. Reduce the interest rate, extend the payment terms, or otherwise finagle with the terms to reach the targeted monthly payment.

Article By Katelyn Tuttle