Obama Refinance and Loan Modification Plan

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In 2009, President Obama stated that there was a refinance and loan modification plan in the works for the several thousands of Americans suffering from pending foreclosures. Depending upon your homeownership status and how much you are struggling with the recent economic turmoil, you may qualify under the Obama Refinance and Loan Modification Plan.

There are two parts to Obama’s plan. Loan modification is the first part. The loan modification is not a new loan; rather it is a modification on your current mortgage. If you qualify for the modification, you and your lender will work to establish new terms on your existing mortgage. To qualify for the loan modification you must meet the following conditions:

* Loan must be financed through Freddie Mac or Fannie Mae
* This must be your primary residence
* Mortgage must be originated before January 1, 2009
* There must be an unpaid balance that is equal to or less than $729,750
* Financial hardship must be proven. An affidavit is required
* Your mortgage payment must be more than 38% of your gross income. Your gross income is the amount of money you make prior to taxes being removed

If you meet these conditions, visit your lender today to see if you can qualify for a loan modification on your existing mortgage.

The other part of the Obama plan is the refinancing of your existing mortgage. If you refinance your home, you will be taking on a new mortgage with new terms. Like the modification plan, there are requirements that you must meet in order to be considered.

* The home must be occupied by you, the owner
* Mortgage payments for the past year must have been made on time or no more than 30 days late
* You must have the income to support the new mortgage
* The loan must be financed through Freddie Mac or Fannie Mae
* The mortgage you currently hold must be worth between 80% – 105% of the home’s current market value

If you meet these requirements and you would like to refinance your home, visit your lender to see what can be done.

Although the Obama Refinance and Loan Modification Program is government run, it never hurts to consult your real estate attorney. An attorney can read a contract better than you can and make sure that you are not missing any key points. The program is designed to help existing homeowners save their homes from potential foreclosure.

Filed Under Things You Need To Know 

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