The American economy is looking at a brutal economic crisis, which has caused loan modification to appear. Due to this economic situation, consumers have cut their spending and almost 6,000,000 homeowners are looking at losing their homes to foreclosures.
Loan modification has been created by President Obama's administration as a way to remedy this situation; if used as it is intended to be, this well-organized plan could play a significant role in the recovery of the economy.
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.
Contrary to a refinance, a loan modification is not an additional loan. Instead, it is a variance in the terms of a loan you already have acquired. Lenders are enticed to join in the loan modification process with government-provided incentives. These are the incentives provided:
1. The borrower's expense is decreased from 38% of gross income to 31% through the government sharing the expense of loan modification with the lenders who choose to participate.
2. For as many as 5 years, the borrower will get $1,000 a year for the balance that is left on the loan.
3. The lender will get as much as $1,500 in return for a qualifying loan modification.
4. The complete government allotment per home could be up to $10,500 for this program.
The following are some advantages that come with the Obama Loan Modification Plan to the Economy:
1. People will save money through the reduced interest rate they will receive upon qualifying for a loan modification plan.
2. There are cash incentives to encourage borrowers to use the modification program.
3. There is also a $1,000 incentive simply for originating the loan modification, and an additional $1,000 for three years. These incentives, obviously, are only valid if you pay your dues on time and do not let them go into default.
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. - 29904
Loan modification has been created by President Obama's administration as a way to remedy this situation; if used as it is intended to be, this well-organized plan could play a significant role in the recovery of the economy.
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.
Contrary to a refinance, a loan modification is not an additional loan. Instead, it is a variance in the terms of a loan you already have acquired. Lenders are enticed to join in the loan modification process with government-provided incentives. These are the incentives provided:
1. The borrower's expense is decreased from 38% of gross income to 31% through the government sharing the expense of loan modification with the lenders who choose to participate.
2. For as many as 5 years, the borrower will get $1,000 a year for the balance that is left on the loan.
3. The lender will get as much as $1,500 in return for a qualifying loan modification.
4. The complete government allotment per home could be up to $10,500 for this program.
The following are some advantages that come with the Obama Loan Modification Plan to the Economy:
1. People will save money through the reduced interest rate they will receive upon qualifying for a loan modification plan.
2. There are cash incentives to encourage borrowers to use the modification program.
3. There is also a $1,000 incentive simply for originating the loan modification, and an additional $1,000 for three years. These incentives, obviously, are only valid if you pay your dues on time and do not let them go into default.
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. - 29904
About the Author:
Anthony Flores is a recognized authority in loan modification software and loan modification processing questions.Visit our site to see if you qualify for loan modification today!
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