May 5
Loan Modification FAQ’s
Posted by admin
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With everything going on in the housing market these days, I have decided to focus this week on a few of your options as a home owner.
In this day and age, loan modifications are a lifeline in a very turbulent sea of foreclosures. There is so much information out there, it can seem overwhelming. Making Home Affordable is part of President Obama’s comprehensive strategy to get the housing market back on track. Through this program, millions of American’s may be eligible to refinance or modify their loans to a payment that is affordable. By providing mortgage servicers with financial incentives to modify existing first mortgages, the Treasury hopes to help as many as 3 to 4 million homeowners avoid foreclosure. You can find the answers to these frequently asked questions and more at www.makinghomeaffordable.gov.
What is a loan modification?
A loan modification is a permanent change in one or more of the terms of a mortgagor’s loan, allows the loan to be reinstated, and results in a payment the mortgagor can afford.
How do I know if I qualify for a Home Affordable Modification?
To apply for a Home affordable Modification, you must:
· Be an owner-occupant in a one to four unity property,
· Have an unpaid principal balance that is equal to or less than $729,750 for one unit properties,
· Have a loan that was originated on or before January 1, 2009,
· Have a mortgage payment (including taxes, insurance, and home owners association dues) that is more than 31% of your gross (pre-tax) monthly income, and
· Have a mortgage payment that is not affordable, perhaps because of a significant change in income or expenses.
If you answered YES to all of these questions, you may be eligible to apply for a Home Affordable Modification.
Do I need to be behind on my mortgage payments to be eligible?
No. Responsible borrowers who are struggling to remain current on their mortgage payments are eligible if they are at risk of imminent default.
I have a second mortgage. Am I still eligible?
Yes, but only the first mortgage is eligible for modification.
How much will a modification cost me?
Borrowers who qualify for a Home Affordable Modification will never be required to pay a modification fee or pay past due late fees. If there are costs associated with the modification, such as payment of back taxes, your servicer will give you the option of adding them to the amount you owe on your mortgage or paying some or all of the expenses in advance.
Is housing counseling required under this program?
Borrowers, especially delinquent borrowers, are strongly encouraged to contact a HUD-approved housing counselor to help them understand all of their financial options and to create a workable budget plan. www.hud.gov
Hopefully this answers some of your questions and gives you a little peace of mind knowing there is help out there. Follow the links provided to answer more questions or see if you qualify.
CATEGORY: Loan Modification
