Some questions about the new loan modification by President Obama
This loan modification plan will offer a second chance for millions of homeowners trapped in unaffordable home loans. This plan is prepared to help those facing foreclosure for qualified homeowners.
Some lenders will be offered incentives to try and get home owners interested in the plan, however each application will be reviewed on a case by case basis.
Top 10 Questions on the Obama loan modification plan:
No, the program is aimed at preventing foreclosures for all homeowners facing a financial hardship now or in the future. Lenders and servicers actually get paid more to modify loans that are not yet delinquent.
If your loan amount is $729,750 or less and was originated before January 1, 2009 more than likely you will qualify for the loan modification plan.
Yes, as long as it is your primary and principal residence. If you own a rental or an investment home you do not currently live in, it will not qualify.
The plan seeks to lower the monthly mortgage obligation (including taxes, insurance and HOA dues) to equal 31% of your gross monthly income. If your current payment equals more than 31% of your gross, you may qualify for a lower payment.
No, this program is only for first mortgage deeds, however your lender may be able to workout a plan to lower or eliminate your second mortgage as the Treasury Department is providing incentives to do so.
No, it is a voluntary program. Most lenders and servicers are expected to participate however because of the generous incentives offered by the Treasury Department.
First, the interest rate will be reduced to as low as 2%, if the ratio is still too high, then the term will be extended to 40 years. If still more is needed, then a portion of the principal balance may be deferred.
The best way to just call a lender you trust or a referred one. You can also check with your local bank or check the government's websites for more information.
You will need certain documents for your lender such as an account of your income and expenses, provide your paycheck stubs, W2 and tax return. The information you provide on your financial statements can have a big impact on whether you will be approved or not, so make sure you know how to complete that correctly. Talk to your lender for exact documents.
The plan is free-there is no charge to apply or qualify. The Treasury Department is warning homeowners against paying any large upfront fees to anyone.
This program could help you stay in your home during these rough economic times. For more information on any Tacoma real estate or any home or property in the Thurston and Pierce County real estate area, don't hesitate to contact one of our agents. We specialize in helping buyers and sellers come together with ease and dedicate ourselves to your real estate transaction.