America's New Loan Modification Plan
The United States Loan modification has appeared due to the economic recession currently in progress. Because of the recession underway, almost six million homeowners about to face home foreclosures. Consumers have also stopped spending as much money.
In order to fight this problem, President Obama has organized a well-formulated and well-devised financial stimulus package for loan modification that if used properly can produce an outstanding incentive to the American economy through the home market system.
According to Obama's Home Mortgage Plan, every new homeowner should be able to have an interest rate of just 4.5% and a 30-year fixed rate mortgage on their home. Current homeowners should be able to refinance at an interest rate of 4.5% if they choose.
Unlike refinancing, loan modification does not start the process of a new loan. It is simply a change in the conditions of the existing loan. There are even some great incentives to encourage lenders to participate in the loan modification process. These incentives include:
1. The borrower's expense will be lowered from 38% of gross income to 31% because the government will assist lenders with the cost of a loan modification.
2. The borrower gets a thousand dollars yearly for the time left on the loan up to 5 years.
3. For each qualifying loan modification in which a lender participates, the lender will receive up to $1,500.
4. The sum of the whole government subsidy for the program could be as much as $10,500 per home.
Some overall benefits to the economy through The Obama Loan Modification Plan are listed here:
1. People will save money due to the reduced interest rate they receive after they qualify for a loan modification.
2. Borrowers are lured into choosing the program because it offers them cash incentives.
3. Additionally, the program guarantees $1000 for the original loan modification combined with another $1000 for three years. However, you have to pay your dues in a timely manner without defaulting in order for this to be the case.
4. The program also is intended to lengthen the loan term and minimize the interest charges if the requirement of paying a percent of total monthly income is not met.
Remember, you must meet particular guidelines to qualify and obtain a new loan modification processing plan. One major guideline is you must be the main resident and the loan can't be from before January 1st 2009.
In order to fight this problem, President Obama has organized a well-formulated and well-devised financial stimulus package for loan modification that if used properly can produce an outstanding incentive to the American economy through the home market system.
According to Obama's Home Mortgage Plan, every new homeowner should be able to have an interest rate of just 4.5% and a 30-year fixed rate mortgage on their home. Current homeowners should be able to refinance at an interest rate of 4.5% if they choose.
Unlike refinancing, loan modification does not start the process of a new loan. It is simply a change in the conditions of the existing loan. There are even some great incentives to encourage lenders to participate in the loan modification process. These incentives include:
1. The borrower's expense will be lowered from 38% of gross income to 31% because the government will assist lenders with the cost of a loan modification.
2. The borrower gets a thousand dollars yearly for the time left on the loan up to 5 years.
3. For each qualifying loan modification in which a lender participates, the lender will receive up to $1,500.
4. The sum of the whole government subsidy for the program could be as much as $10,500 per home.
Some overall benefits to the economy through The Obama Loan Modification Plan are listed here:
1. People will save money due to the reduced interest rate they receive after they qualify for a loan modification.
2. Borrowers are lured into choosing the program because it offers them cash incentives.
3. Additionally, the program guarantees $1000 for the original loan modification combined with another $1000 for three years. However, you have to pay your dues in a timely manner without defaulting in order for this to be the case.
4. The program also is intended to lengthen the loan term and minimize the interest charges if the requirement of paying a percent of total monthly income is not met.
Remember, you must meet particular guidelines to qualify and obtain a new loan modification processing plan. One major guideline is you must be the main resident and the loan can't be from before January 1st 2009.
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