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Home » Business » Homeowners avoid Foreclosure with Government Loan Modification Program

Homeowners avoid Foreclosure with Government Loan Modification Program

By Victoria Brown on July 22, 2010
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Digital News Report – The housing market around the nation has been hit hard by decreasing home values. To make matters worst, the economy has suffered as well because many have either saw their income decrease or have lost their jobs. Because of the housing crisis and the steep increase of housing foreclosures home prices spiraled to even lower values. The government loan modification program was started in an attempt to slow down and stop the number of homeowners from losing their homes to foreclosure.

The Home Affordable Modification Program (HAMP) was created by President Obama and Congress to help struggling homeowners refinance their existing mortgages into lower payments. By doing this homeowners can get lower interest rates, get earned principal forgiveness, and extended terms. All these strategies can be used to help homeowners afford their mortgage payments.

Home Loan Modification Requirements

  • 1)Your mortgage loan needs to have originated before January 1, 2009 to qualify. The principal, interest, insurance, and property taxes have to add up to more than 31 percent of your monthly gross income.
  • 2)You have to allow your lender to verify your income with a signed IRS 4506-T form. You will also need to provide other proof of income such as pay stubs or balance sheets if you are self employed.
  • 3)You have to live in the property that you are asking for the loan modification. The home loan balance cannot exceed $729,750. You can apply if you own a duplex, triplex, or quad unit property, but the owner has to live in one of the units and the unpaid balance limit can be higher for these kinds of properties.
  • 4)You have to show that you are at risk to defaulting on the mortgage loan.
  • No Cost to Participate in the Modification Program

    The government home loan modification program is free and there are also HUD approved counselors that are free to consult. The loan servicers are “required” to work with the borrower unless it was prohibited in the original loan documentation. Once you start applying for the home loan modification, the lender will set up a trial modification. You will more than likely also need to complete paperwork during this time frame as well. Once you have met all the paperwork requirements and have made your payments on time, your loan will become a permanent modification.

    By: Victoria Brown

    1. Avoid Foreclosure – See if you qualify for Obama’s Government Home Loan Modification Program
    2. Government Loan Modification Program Saves Homes From Foreclosure
    3. Loan Modification Programs – Government Help for Homeowners
    4. Obama’s Government Home Loan Modification Program – What are the Requirements?
    5. Government Loan Modification Program Helps Homeowners

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    This site is for informational purposes only.  Always check with your doctor or  legal council before making any medical or legal decisions.

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