Unless you have been in outer space, you have heard a lot of talk about Obama’s Home Stimulus Package. You might wonder what it actually is about. What does it offer for homeowners who face the very real possibility of losing their homes through foreclosure?
The government is paying incentives to approved banks to grant a loan modification to homeowners who are struggling to afford their monthly mortgage payment. These loan modifications create a lower monthly payment, hopefully, that the borrower can make without strain. Ultimately, it is geared to reduce the massive number of foreclosures in the United States. The target payment is less than less than 31% of their gross monthly income.
What is the qualification criteria for application? The following are among the important guidelines for application:
The home must be your primary residence; a vacation home does not qualify. The original loan must be $729,750 or less. The loan must have been signed on or before January 1, 2009. The current monthly payment, plus taxes, insurance, and homeowner dues, must be more than 31% of the homeowner’s gross monthly income. The homeowner must prove a financial condition of hardship. This constitutes events beyond their control that have greatly increased their expenses or decreased their income and made paying their mortgage payment almost impossible. This must be verified with the proper documentation. The homeowner also must be able to present a budget workup that shows the ability to pay the new, modified payment. The lender will be looking for an attitude demonstrating the willingness and commitment to fulfill this obligation in the future.
There is a limit of one reworked mortgage per homeowner, and consequently, you can only apply once. So, you want to get it right the first time. Be sure you obtain all the information you need to adequately prepare your application package. Almost all experts advise you to do you homework before you contact your lender. and, by all means, do not give them any figures until you have prepared your figures and other data to your advantage. For instance, if a homeowner did not know that the taxes, insurance and dues were included in the payment figure, you could easily misspeak concerning your budget figures.