The record number of foreclosures that have impact the United States has sent shock waves through the nation. Sadly, the development of such a high, record number of foreclosures is the result of a rapidly deteriorating economy coupled with record unemployment. With limited funds, people are not able to make their monthly mortgage payments. Ultimately, this leads to foreclosure. Thankfully, for those that may find themselves in such a serious situation, President Obama's home loan modification program may prove to be the solution to one's mortgage ills.
The home loan modification program is a federally backed program that allows troubled borrowers to renegotiate the terms of the mortgage. This way, the potential to get back on the path to timely payments is made more likely. Such an outcome can be achieved by lowering monthly payment amounts, reducing interest rates, among other solutions.
However, you simply cannot request a home loan modification and receive approval. Certain criteria need to be met and they include:
The homeowner needs to be facing a legitimate and serious financial hardship. This program is intended for those that legitimately cannot pay their mortgage.
The applicant must be currently employed. This is to ascertain a steady income that will be put towards the newly modified mortgage payments.
The home must be a primary residence. You cannot seek a modification on a home that is an investment property or a vacation dwelling.
The balance on the mortgage must be more than 80% of the value of the home. In short, the home loan modification program is not intended to cover homes terribly "underwater" in terms of value. Also, the balance must be less than $729,751 in order to qualify.
There needs to be a reasonable expectation that you will eventually become current on your mortgage. There also needs to be an expectation that you will not fail behind again in the future. The home loan modification program is not intended to buy time for those that will never be able to avoid foreclosure. Rather, it is intended as a safe program for those that need a slight change to their current terms in order to get out of a proverbial hole.
The criteria for the home loan modification program are rather basic. The program is intended for those legitimately unable to pay. The hope here is that the new program will enhance the potential to avoid foreclosure and return to solid financial footing in the future.
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