| Homeowners stuck with a high interest rate home loan | | | | Principle residence means that you reside in this home |
| or facing a financial hardship and no longer able to | | | | as your primary place of residence. Duplex and |
| afford their mortgage may qualify for a federal loan | | | | fourplex units may have high loan balances this |
| modification program that will offer a low, affordable | | | | program. The new modified payment will be targeted |
| payment. The Treasury Department is offering $75 | | | | to equal just 31%- this means that the total housing |
| billion in incentives to lenders who agree to standard | | | | debt, including principle and interest, taxes and |
| terms and conditions when modifying homeowners | | | | insurance and HOA if applicable will equal just 31% of |
| bad loans. | | | | the gross monthly income as stated. |
| The goal of the Obama federal stimulus loan | | | | The benefits of the federal loan modification plan |
| modification plan is to halt foreclosures and provide | | | | include: |
| affordable payments so borrowers can stay in their | | | | - Interest rate reduced to as low as 2% |
| homes. Most of the toxic loans are exotic products, | | | | - Loan term extended to 40 years |
| like the negative amortization loans which were widely | | | | - Possible principal reduction or forbearance |
| sold but difficult for the average homeowner to | | | | - Late fees and penalties waived |
| comprehend. Decreasing home values combined with | | | | - Loan brought current |
| increasing loan balances have proved to be a lethal | | | | - Second liens eligible for interest rate of 1%, or debt |
| combination. Understandably, lenders are anxious to | | | | may be retired altogether |
| get these ticking time bombs off the books by offering | | | | If you have an unaffordable home loan, now is the |
| customers a loan workout. | | | | time to learn about your loan workout options. The loss |
| There are some basic qualifications for a federally | | | | mitigation departments are accepting applications for |
| sponsored loan modification: | | | | this federal program from homeowners suffering a |
| - Principle residence only | | | | financial hardship and seeking an alternative to |
| - Loan amount less than $729,750 | | | | foreclosure. Take the time to learn as much as |
| - Current payment equals more than 31% of the gross | | | | possible about the loan modification process and |
| monthly income | | | | whether you might qualify for this loan modification |
| - Loan taken out prior to January 1, 2009 | | | | program. It could be the answer you are looking for to |
| - Homeowner facing a financial hardship situation. | | | | save your home. |