Home Affordable Modification Plan

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The Home Affordable Modification Plan is being implemented by the Treasury Department under President Obama’s new bill. The cries of homeowners have finally been heard and finally a viable option presents itself. There is a caveat though, you must first qualify and after qualifying you must go through a trial period. Here are a few more details about the program.

Who can qualify: You must be occupying the residence and have it be considered as your primary residence. Additionally, you must be facing financial hardship and prove that you are or are about to face difficulty paying your mortgage. If you are about to face foreclosure, the process will stop when qualifying for this program.

What are the guidelines?: In order to qualify under this plan your current mortgage payment must be greater than 31% of your income (before tax). Your loan must also have been originated before January 1, 2009.

What does the plan call for?: Under this new plan, your mortgage rate will be reduced to achieve a mortgage payment 31% or less of your current income (before tax). After your interest rate and monthly payment has been reduced you must demonstrate that you are able to make your new payment on time for a trial period of 3months. After these three months if all payments are made on time, you will be locked into the newly reduced rate and payment for a period of 5 years!

Is it free?: Yes, it is 100% free for the borrower. Your current lender will even pay for your credit report!

What’s in it for the lender?: The lender now does not have to foreclose on the property. Secondly, for every borrower who successfully qualifies and stays in the program they will receive a $1000.00 a year for 5 years from the government program.

How long will this last?: This program will be accepting applicants up until December 31, 2012.

Please be aware that lenders are NOT required to join or implement this program however, with the incentives being offered to them by the government and the increased amount of foreclosures and delinquencies a large amount of lending companies have started to implement this process.

For more information on programs like these and other South Florida Foreclosure news check back with us again next week or visit www.g-sig.com for another blog installment.