The loan modification plan announced by the American President Barack Obama has come as a huge source of relief for the ones struggling to repay their loans. As is evident, the U.S. has been one of worst victims of recession and the U.S. economy has hit a major slump. One of the major causes of this economic downfall has been the terrible state of mortgage industry.
The home loan modification plan was developed to get the situation under control. It is an elaborate program that focuses on assisting both borrowers and their lenders. The government estimates it will help about 5,000,000 American homeowners who are in danger of losing their home to a foreclosure. As a secondary goal, the plan aims to rescue the troubled housing industry.
This plan gives the homeowner the chance to restructure, or modify, his or her current mortgage. This can be done by lowering the interest rate and/or extending the loan's term to give the debtor more time to repay it. A borrower's maximum mortgage payment cannot exceed 31% of their income, and their loan term may be lengthened to as much as 40 years.
You have to fill a few requirements, however, if you want to participate in this loan modification program. In order to qualify, you have to have been severely affected by the current economic recession, whether from layoffs and/or job cuts, or even foreclosures. You also can't have more than around $730,000 remaining in your debt, or else you can't get help. You have to be able to prove your need for financial assistance by showing documentation displaying one's financial situation and income, as well as other evidence.
The lenders will also be helped by this with cash incentives from letting debtors benefit from the new program, so it helps everyone. It also saves them the increased trouble of foreclosing on a home, which costs a lot of money. With the new plan and the added help from the government, they at least get some money.
So, the home loan modification plan established by the federal government, in conjunction with the lending industry, has advantages for both borrowers and lenders, and it will also boost the ailing real estate market.
The home loan modification plan was developed to get the situation under control. It is an elaborate program that focuses on assisting both borrowers and their lenders. The government estimates it will help about 5,000,000 American homeowners who are in danger of losing their home to a foreclosure. As a secondary goal, the plan aims to rescue the troubled housing industry.
This plan gives the homeowner the chance to restructure, or modify, his or her current mortgage. This can be done by lowering the interest rate and/or extending the loan's term to give the debtor more time to repay it. A borrower's maximum mortgage payment cannot exceed 31% of their income, and their loan term may be lengthened to as much as 40 years.
You have to fill a few requirements, however, if you want to participate in this loan modification program. In order to qualify, you have to have been severely affected by the current economic recession, whether from layoffs and/or job cuts, or even foreclosures. You also can't have more than around $730,000 remaining in your debt, or else you can't get help. You have to be able to prove your need for financial assistance by showing documentation displaying one's financial situation and income, as well as other evidence.
The lenders will also be helped by this with cash incentives from letting debtors benefit from the new program, so it helps everyone. It also saves them the increased trouble of foreclosing on a home, which costs a lot of money. With the new plan and the added help from the government, they at least get some money.
So, the home loan modification plan established by the federal government, in conjunction with the lending industry, has advantages for both borrowers and lenders, and it will also boost the ailing real estate market.
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Anthony Flores is highly recognized in the field of do it yourself loan modifications and loan modification processing questions.Visit our site to see if you qualify for loan modification today!
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