| Loan modification is a possible option for | | | | 2. A detailed accounting of your monthly gross |
| homeowners facing unaffordable mortgage | | | | income-all sources, including any room mate |
| payments, declining home values and a troubled | | | | income-and a listing of your monthly bills. The bank |
| economy. President Obama,the Treasury Department | | | | will run your credit report to verify your minimum |
| and many lenders are offering a loan modification | | | | payments due on your accounts that are reported, |
| program that will feature easier, quicker and more | | | | other items like food, gasoline, babysitter, etc can be |
| helpful procedures to assist homeowners to find a | | | | adjusted to fit within your new, trimmed down |
| loan workout solution. Many homeowners facing | | | | budget. |
| foreclosure are desperately seeking help from their | | | | 3. Information on your assets-cash in the bank, |
| existing home loan banks, and up until now, help has | | | | retirement accounts, etc. If you have more than 3 |
| been slow in coming. | | | | months of reserves in the accounts you list on your |
| The federal stimulus loan modification plan is called | | | | application, you may not be deemed to be in a |
| Making Home Affordable Modification. Funded by $75 | | | | hardship situation. |
| billion in stimulus money, it aims to reach almost 5 | | | | 4. You will be asked to provide copies of your 2 |
| million at-risk homeowners with an affordable | | | | most recent paychecks, 2 years tax returns, 2 |
| mortgage payment. The program is voluntary, but | | | | months bank statements, proof of any other income |
| the majority of lenders and servicers are | | | | and a written explanation of why you need a loan |
| participating-mainly due to the financial incentives | | | | modification-Hardship Letter. |
| offered for each qualified loan that is modified using | | | | Why is a loan modification something you should |
| the standard terms put in place by the Feds. A list of | | | | apply for? While the economy seems to be collapsing |
| participating banks is available on the | | | | around the world, and home values continue to |
| makinghomeaffordable.gov website. | | | | decline, loan modifications seem to be one viable, low |
| So, just what does it take to apply and qualify for | | | | cost solution for homeowners to stay in their home |
| Obama's stimulus loan modification plan? There are | | | | and ride out the storm. While not every borrower will |
| some basic requirements which must be met: | | | | qualify for a loan modification, hundreds of thousands |
| | | | of homeowners have already received loan |
| 1. Loan originated prior to January 1, 2009 | | | | modification help, and these federal programs promise |
| 2. Loan amount less than $729,750 for single unit | | | | to help thousands more to find a loan workout |
| properties | | | | solution. |
| 3. Current mortgage payment equals more than 31% | | | | Homeowners need to take the time to learn about |
| of monthly gross income | | | | their options, educate themselves and be proactive in |
| 4. Live in the home as your primary residence | | | | working with their lender. It is estimated that over |
| 5. Facing a financial hardship situation due to less | | | | 70% of all foreclosures could have been prevented if |
| income or more debts | | | | the homeowner simply contacted their lender. Waiting |
| Interested in apply for this plan with your lender? | | | | too long is the worst thing a troubled homeowner |
| Here is what you will be asked to provide to your | | | | can do, as soon as the borrower sees a problem |
| bank-either over the telephone or in the form of a | | | | being able to make their mortgage payment, they |
| written loan modification application. | | | | should call their lender and start the process. The |
| | | | federal government is encouraging all distressed |
| 1. Description of financial hardship situation-what has | | | | homeowners to work directly with their lenders to |
| happened, when it happened and what steps you | | | | find a loan workout solution. |
| have taken to try to correct the situation | | | | |