The Obama Administration’s loan modification program – Making Home Affordable – is an opportunity for anywhere from six to nine million homeowners in danger of foreclosing on their homes to reduce their monthly payments to an amount within their means.
How do I know if I qualify for the loan modification program?
Well, if you can answer “yes” to the following five questions, you are an eligible candidate to modify your loan:
1. Did you get your current mortgage before January 1, 2009?
2. Are you having problems with paying your mortgage on time?
3. Is your home in danger of foreclosure your primary residence?
4. Is the amount of money you owe on your first mortgage equal to or less than $729,750?
5. Is your payment on your first mortgage (including principal, interest, taxes, insurance, and homeowner’s association dues, if applicable) more than 31% of your current gross income?
Need help with question 5? Use this loan modification evaluator tool.
If you are unable to answer “yes” to the above questions, you may still have some help over the horizon. The following options may be available to you:
1. Repayment Plan: Many lenders are willing to work with borrowers who have missed one or more payments by offering a schedule for repaying past-due amounts.
2. Forbearance: Under a forbearance agreement, the lender may allow the borrower to pay a portion of the regular payment, or possibly no payment at all for a specific time. This option is often based on the borrower’s current financial status. After the forbearance period has expired, the borrower must continue to make regular payments in addition to covering the past-due amount.
3. Active Duty Military: Special mortgage relief programs have been designed to aid borrowers who are active military service members.
4. Short Sale: Also known as a pre-foreclosure sale, is designed for borrowers who cannot sell their home for the amount owed on the loan; but instead the lender may be willing to accept a lower amount than the loan is written for.
5. Deed-in-Lieu of Foreclosure: If the borrower is unable to sell within a reasonable timeframe, the lender may be willing to allow a voluntary transfer of the property deed to help reduce the impact that a foreclosure has on an individual’s credit rating.
Resources:
http://www.makinghomeaffordable.gov/
http://www.financialstability.gov/
http://www.treas.gov/press/releases/reports/guidelines_summary.pdf
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Personally, I know of several friends and clients who are eligible to take advantage of the loan modification program. I hope this will help aid the housing sector back to recovery. We’ll see soon enough!
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I think this is great hand for eligible candidate and this administration’s program of loan modification program are so helpful for him.
i am just waiting for the price of lands to get cheap so that i can have big house. the behavior of real estate business people is not that good and they just think that they should get profit, government should have law and restrict the people from rising the price of lands.
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Well, its better then nothing. I think many people can take advantage of this loan modification program. Here in Spain do our Zapatero (Prime Minister of Spain) nothing, he only talks about the crises and hope your President Obama is coming and help him. I hope Obama’s program Making Home Affordable is going to be a success.
In recent weeks banks have become more willing to work with short sales. It keeps both the bank and homeowner from having to go through the entire foreclosure process. We’ve actually had banks contact us to help move their properties as a short sale.
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Likewise not much is being done about it here in the UK. Our Prime Minister is just saying how we need a New World Order to deal with all the financial woes.
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Thanks for the tips, with the financial times gone sour this helps
Ah well, will spend this saturday watching anime online at AnimeTip! Hehe
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Some banks are actually contacting people facing foreclosure to see if something can be worked out. How are things going Jayson?
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Charles – It’s good to hear that banks are starting to contact their customers and try to keep their business. It’s in their best interest to keep people in homes and away from foreclosure. It’s a shame that the Making Home Affordable Plan had to give them some incentive to get the ball rolling.
Do you know if it’s a bank or two in particular or are several banks contacting homeowners?
Things are well Charles, thanks for asking. How are you doing?
I am a little skeptical, but I really hope the loan modification program really helps out. Sometimes I think that no matter how much money we throw at it, this problem just needs to run its course.
My guess is that more needs be done. Wells Fargo offered me pretty much the same options last year through a repayment plan. This plan doesn’t go far enough in my opinion.
I like Obamas viiew on things and the way he’s going to tacklethem. It all depends to be honest on whether he does it or not!
Despite politics that are a little more to the right than the left, I must say this proactive approach to helping families remain in their homes with several different programs is helping in my area. I know of Sellers who have taken advantage of these proccesses to do just that.
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Joe – It’s good to hear that the programs are working for people in your area, Joe. Thanks for stopping by and letting us know.
As an outside observer, is the program doing it’s job? It seems like a lot of people still don’t know about it, or how they can arrange some sort of modification. Plus I’ve heard that there are some scammers out there that pretend to modify a mortgage and they just steal your house.
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I am not very hopeful but this will help some people to have their homes back.
My guess is that more needs be done. Wells Fargo offered me pretty much the same options last year through a repayment plan. This plan doesn't go far enough in my opinion.
I think it will be more helpful than many people thought before.
It doesn't matter if you qualify, TONS of people qualify. The banks simply won't do it. Apparently it's not profitable enough for them. Supposedly this program was designed to help 400,000 people… it's actually helped about 50. It's a publicity stunt and a scam, not a solution.
I'm just one example: Wife lost her career. Had a 24wk preemie with serious health issues. Lost our car, have no savings left. But in spite of that, we stayed current and never missed a single payment, desperately trying to keep our home despite the horrible 20yr / 7.125% loan… would Wells Fargo help us? We qualify in every way for this Making Home Affordable program- a Mannie Mae loan, owing less than 105% of value, lived here two years…
Nope.
According to them, we don't qualify because we have mortgage insurance. We haven't paid them enough yet, I guess. Now we're forced to walk away from our home next month. No other options left.
I'm not the only one. Check forums, discussion groups, comments on other websites. This farce is slowly being shown for what it is.
So thanks a ton, Obama. HOPE no one makes the mistake of voting for you next time. The only CHANGE I see is instead of just not helping, you're PRETENDING you are.
It’s good to hear that the programs are working for people in your area, Joe
Personally, I undergo of individual friends and clients who are pensionable to suffer advantage of the give qualifying schedule. I outlook this instrument ameliorate aid the construction facet sanction to effort. We’ll see shortly sufficiency!
It is hard to track the real numbers for this program and estimate their ultimate success versus their cost. I do wonder how the market will perform after this program, the first time buyer tax credit, and other federal programs are retracted?
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I also know a few people who are having success with loan modification, my only concern is the people who COULD afford their payments but decide they want to default in order to get a lower payment. You would think having their credit score lowered would keep them away from such abuse but according to recent news reports that doesn’t seem to be stopping them.
Hey & thanks for the loan modification evaluator tool in particular. I found it extremely useful. Keep up the good work!
How fair is that for the insurance companies? People were given mortgages that they could not afford in the first place, now we have to back-step to allow them to keep something they had no right to in the first place?
My brother got a really great break on his new house because he is active military. Hopefully, this was helpful to a lot of people. Isn’t the time frame for these offers about over?
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Good info. Being in a city with a high foreclosure rate, I can tell you that it was not made very clear to many people what their options were. People were very confused and misinformed. Some people told them to miss a payments before they can receive help and others told them that they cannot be late on payments to receive assistance.
I live in Florida and our home values have dropped 50% in the last few years. There was a report the other day the values will go down another 30% in the next 18 months.
Well, Freddie Mac sent me a fedex package telling me that they want to try to get me help from the Making Home Affordable plan…I qualify under everything except one…the 31% of our income..well technically if they go with my husband’s income (he’s the only one on the mortgage), then we MORE than qualify…but i know they are looking at my income too and that will kick it out…but they need to look at ALL our financial obligations and the fact that they are basing things on our GROSS income…I don’t know what we will do if we don’t qualify…we are only one month back on our payment, but we can’t seem to get on top of things.
This sounds like a very good idea. At last a governemnt is looking to help the ordinary man and woman instead of the fat cats sitting in their banks and finance houses, you know the ones that caused the chaos in the first place with their greed. Its about time.
Obviously, it’s people like this where the economy turning around and home prices rising is NOT a good thing.
The idea of giving these reduced and affordable prices of home’s is great and I must give Obama a two thumbs up for these. I know in these times of recession its hard to afford a house and it greatly increases the amount of homeless people Obama did foresee this things that’s why he made this plan.
Has anybody heard lately how this is going? I know it’s been challenged with all sort of different issues from both the lender and borrowers perspective. One huge issue is it doesn’t cover or do anything for folks who have mortgages with private investors.