Obama's Home Rescue Plan
How You Can Save Yourself from Foreclosure?
If youre facing foreclosure on your home, there is new hope on the horizon. As part of the stimulus program passed by Congress, the Home Affordable Modification program can help you save your home and preserve your credit. Getting the details on this program will help you decide whether or not its for you and give you the information you need to apply for it.
Since this bailout program is paid for with tax dollars, you are entitled to apply for it if you qualify. It has been funded by the $75 billion stimulus funds. When a bank receives a request for the Home Affordable Modification program, the bank will be paid by the Treasury Department to modify the loan.
The Obama Home Affordable Modification Program makes it easier for banks to offer loan modifications to their customers. A loan modification will change the nature of your home loan so that your payments will equal 31% of your gross monthly income. This new figure, which is called your target payment, will be achieved by changing the interest rate on your loan, extending the life of your loan up to 40 years or forgiving a portion of your principle balance. Your lender will have the option of which of these methods they will use to modify your loan.
In order to qualify for this program, you need to have a few pre-existing conditions. Youll need to make an appointment with a loan officer at your financial institution and bring your proof of income. This can be done in the form of pay stubs, tax returns, award letters, profit and loss statements or any other type of verification that you need. You will also need to bring two months of bank statements from whatever bank you currently bank at. Finally, you need a letter of explanation to account for your financial hardship. You need to explain why your income has decreased or your expenses have increased to cause you to miss payments.
To apply for the loan, youll fill out financial statements based on the information that youve brought with you. This will give your bank a clear picture of your overall financial situation. It will help them decide how to modify your loan, if you qualify. Its absolutely necessary that you fill out this paperwork correctly. If you dont get it exactly right, youll risk not being approved for the loan modification.
Once you are approved for the loan, youll be able to stay in your home and avoid foreclosure. Foreclosure is a costly process for banks so its ore beneficial to them to modify your loan and keep you in your home. You should look for a long term solution to your mortgage troubles. Make sure that the loan modification you are approved for includes flat monthly payments and no balloon payment after a period of time. Read the fine print, just like you would with any other financial document so you know exactly what you are getting yourself into.
With a completed application and a strong case, you can find relief from foreclosure and stay in your home with Obamas home rescue plan.
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