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The New Loan Modification Remedy For America
The United States economy is under extreme pressure; because of this, loan modification has been created. Almost six million homeowners currently face foreclosure and the recession is mostly to blame; consumer spending is way down as well.
Loan modification has been created by President Obama’s administration as a way to remedy this situation; if used as it is intended to be, this well-organized plan could play a significant role in the recovery of the economy.
According to Obama’s Home Mortgage Plan, all individuals will be able to obtain a 30 years fixed rate mortgage with a low interest rate of 4.5%. Also, current homeowners would have access to refinancing at a 4.5% interest rate.
Unlike refinancing, loan modification isn’t like receiving a new loan. Instead, it is actually changing the terms of your current loan. The government offers incentives to homeowners who decide to go with the loan modification process. The following are the incentives:
1. The borrower’s expense will be lowered from 38% of gross income to 31% because the government will assist lenders with the cost of a loan modification.
2. For as many as 5 years, the borrower will get $1,000 a year for the balance that is left on the loan.
3. For each qualifying loan modification in which a lender participates, the lender will receive up to $1,500.
4. The U.S. government could subsidize up to $10,500 per home.
The following are some advantages that come with the Obama Loan Modification Plan to the Economy:
1. People will save money through the reduced interest rate they will receive upon qualifying for a loan modification plan.
2. There are cash incentives to encourage borrowers to use the modification program.
3. The program guarantees $1000 when you accept the original loan modification as well as $1000 for 3 years. However, this is on the condition that you are not late on your payments and don’t go into default.
4. Also, the program plans to lower the interest rate and raise the term of the loan, if the desired percentage of gross monthly income isn’t met.
Remember, you must meet particular guidelines to qualify and obtain a new loan modification processing plan. One major guideline is you must be the main resident and the loan can’t be from before January 1st 2009.
Anthony Flores is a recognized authority in loan modification software and loan modification processing questions.Visit our site to see if you qualify for loan modification today!
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