Friday, June 26, 2009

Obama’s Loan Modification – The Affordability and Stability Plan

Obama’s loan modification – the Affordability and Stability Plan – has been created with the aim of helping millions of Americans stay in their homes. Homeowners have been informed about this intelligent plan through various methods, with the eligibility criteria being present online, in the newspaper and of course, on television.

We will present to you a few of the eligibility criteria but you should know that there are several others that might make you a suitable candidate for loan modification. In order to qualify for Obama’s plan, you have to live in the house and be able to prove your income, the loan you have taken must be held either by Fannie Mae or Freddie Mac and the monthly payments should exceed 31% of your income.

Even though people haven’t talked about anything else in the past few weeks, it is true that the President’s plan did come into effect on the 4th of March. Homeowners were advised to complete the required documents and find an experienced lawyer to represent them in the legal process. For many of them, entering the loan modification plan is a sure way to stop foreclosure and keep their homes. By negotiating the terms of the contract, they might be able to obtain a lower interest rate and reduced monthly payments. The lender might decide to forgive payments that were missed and all late fees will be removed. These are all advantages that loan modification brings and it’s no wonder so many homeowners want to join.

We have already mentioned something about the monthly payments exceeding 31% of your income. How is the loan modification plan going to lower your mortgage payments? The truth is that many efforts have been made in that area and that the Obama administration hopes to accomplish this objective through three major changes. First, they want to reduce the interest rate to as low as 2%. The second step is to extend the term of the loan, with a maximum of 40 years. Last but not least, both the government and the lending institutions have agreed that this is the right time to reduce the principal, supporting the loss and aiding homeowners.

These are basically a few ideas about Obama’s loan modification – the Affordability and Stability plan. If you need more information, you can always trust the Internet as a reliable source. Find out how and when to apply, what the other requirements for applicants are and how the plan is going to work for homeowners in distress.


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