Understanding Obama's Federal Loan Modification Program

Obama's federal loan modification program could be the answer you have been searching for! It is designed to save the homes of nearly five million people who are currently facing the harsh reality of losing their homes. The home loan modification program will be handled by your lending institution, which is required to abide by specific rules set forth in Obama's home stimulus plan. The end result is expected to stimulate the economy by saving millions of people from foreclosure.

In order to understand the nuts and bolts of this loan modification program, let's explore exactly what it could do for you, the home owner. It is designed to look at your mortgage, and then lower your interest rate. It could be set as low as 2% depending upon your financial situation. In addition, the home loan modification offers a very unique twist! If your payments are made on time, you could qualify for the Treasury to pay up to $5,000 towards your principle over a 5 year period. This is one of the best motivators for home owners that are seeking relief from Obama's stimulus plan.

The loan modification program (like all other loans) requires that you have all of the necessary paper work as well as an application completed. It is crucial that you talk to your banker and obtain all of the paperwork needed to facilitate this mortgage modification. You will need to keep a copy of each document in case you are ever asked to verify your eligibility once approved. Be prepared, talk to your lending institution, and obtain as much information as possible. This will make the approval process, as well as any future verification stress free.

Your first step should be to calculate your debt ratio. You can do this yourself; simply divide your primary residence monthly cost by your monthly gross income. If the total is below 45%, you should have no problem getting approved for the home loan modification program. The next step is to contact your financial institution. The home stimulus package, including this home loan modification program is designed to save your home. Get the forms, do the paperwork, and you can be one of the 5 million home owners back on the road to security!
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About the Author
by Scott A. Kennedy
Click here to learn how to get qualified for Obama's mortgage Loan modification .