Very few borrowers were granted a modification and the only options for homeowners in danger of losing their homes could only get refinancing or face foreclosure. President Obama’s stimulus plan allows for these borrowers to obtain a loan modification in which the terms of the original loan are changed in order to make payments more affordable.
Programs may include reducing the interest rate, extending the term of the loan from 30 to 40 years, or adding missed payments to loan balance. Essentially, the negative amortization loan adds the unmet portion of interest and principal payments each month to the principal balance.
Late fees and a portion of principal could be reduced or forgiven.The loans to be modified must be owned or serviced by Fannie Mae or Freddie Mac. Under the Mortgage Forgiveness Debt Relief Act, taxpayers can exclude up to $2 million of forgiven mortgage debt on their principal residence in 2007, 2008 or 2009.
Your job as a homeowner is to be to be able to prove that you need and deserve a loan modification and can meet the new payment terms of your modified loan.
Under the MHA plan, in order to qualify for a loan modification, the homeowner must be living at the address of the home for which they are applying for a mortgage. You should keep a few things in mind though when you have decided to go for mortgage modification loan.The first thing to bear in mind is not to get desperate while looking for help. Low-doc home loans are those loans in which the borrower is either unable to or unwilling to submit proof of income.
Hire a specialist to work with you and assist you in submitting your application and negotiating your new terms. Their staff is well-trained in the art of negotiation and aware of all legal ramifications. We have no fear of litigation nor creating bad press for the 800 pound gorillas threatening the consumer.
But for those whose homes are in danger of being foreclosed due to non-payment of mortgage, there are ways to stop the process or declaring bankruptcy. A bankruptcy is a negative remark that remains on credit reports for ten years.