Obama Loan Modification Program A Hinder To Suffering Homeowners?
Loan modification program difficult process
With a prolonged housing market slump across the nation, homeowners suffering from decreased housing values have sought relief from foreclosure by applying for a loan modification. To add to the pain, the national economy has suffered due to many homeowners having lost their jobs as a result of a failed Obama bailout.
The resulting housing crisis and the sharp increase in housing foreclosures has caused home prices to spiral increasingly downward. The government loan modification program (HAMP) began as an attempt to slow down the number of homeowners losing their homes to foreclosure.
The Home Affordable Modification Program (HAMP) was originally created by President Obama to aid homeowners in refinancing their existing mortgages into lower payments in an effort to avoid foreclosure. By doing so, homeowners try to receive lower interest rates as well as an earned principal forgiveness and extended terms.
In order to qualify, homeowners need to have a loan originated before January 1, 2009. The principal, interest, insurance, and property taxes need to total more than 31 percent of the homeowner’s adjusted monthly gross income. Additionally, the homeowner will need to provide the lender with a signed IRS 4506-T form as well as other proof of income in the form of pay stubs or balance sheets for self employed individuals.
Homeowners will need to have lived in the subject property and considered it a primary residence while the loan balance can’t exceed $729,750.
The government home loan modification program (HAMP) is free to qualified homeowners and there are also HUD approved counselors available for consultation.
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