The effects of the recession have had a far-reaching impact on the economy of the United States of America. Lots of homeowners have reached a crunch point where they do not have enough money to pay the mortgage on their homes. To counter this, the federal plan launched by President Obama, titled the Home Affordable Plan, aims to help the homeowners to stall the foreclosure on their homes. But not everyone can apply for mortgage modification loan. There are some criteria which have to be fulfilled.
The first point is that the home should be the primary residence of the owner. Only owner residence properties can be considered for home loan modification. Most people who own a house under mortgage and are delinquent can fit into this. The newer version of the homeowner's plan tries to involve a larger section of homeowners. You do not have to be delinquent presently but if you can prove that the ongoing events are affecting your financial condition badly to the effect that you might face problems in the future, and then you qualify to get the mortgage modification loan.
There are aspects of this modified loan scheme which have a deadlock on your situation. For instance, if you are unable to pay off the modified loan payments in the period extending to 6 months after the modification, then the lenders will put you back in the old bracket. Instead of getting a loan modification, you will have to pay the original mortgage payments.
The modified loan would be definitely less than what you pay right now. The essential fact which the government is trying to achieve is that the monthly loan payment should not extend to more than 31% of your monthly gross income. The rate of interest in the modified loan can go as low as 2% and a portion of the principal amount is also deferred.
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