All About Home Affordable Loan Modification Programs

In order to provide more aid to the economy of the United States, in particular the lenders and homeowners, who face the risk of losing their homes President Obama has introduced his new stimulus plan Home Affordable Modification Plan. The plan offers a helping hand to millions of people, however not all may be lucky enough to qualify for the program. Successful applicants, will be required to hand in application stating their hardship circumstances, current and future expected income rates and expenses as well as meet certain eligibility requirements.

In order for homeowners to avoid foreclosure and to keep their homes Home affordable Modification Plan has already attracted the majority of the lenders and it also encourages homeowners to learn the specifics of qualifying and applying for a loan modification plan.

Although the Affordability and Stability Plan will allocate $75 billion dollars to aid borrowers facing hardships and falling behind their payment schedules, not all will be able to benefit from the program. The program is solely voluntary for homeowners and it gives lenders the right to chose who will be able to participate in the loan modification program and who won't. There will be certain incentives provided to lenders by the Federal government, however in the end the final decision will be made by each bank. The stimulus plan will require each homeowner to gather and present certain documentation and complete the loan modification forms in order to be considered for eligibility.

Some general guidelines for being considered eligible for the participation in the loan modification program is to provide proof of primary residence in the house, demonstrate second mortgages, provide detailed information and proof of current income and expenses, show that the current house payment equals or exceeds the 31% of your gross monthly income, provide proof that the loan was acquired before January 1, 2009 and it is less than $729,750, as well as provide the details of your hardship situation.

Before gathering the required documentation, completing the application forms and applying for the program make sure to consider any possible changes that can be applied to your budget. If you succeed in doing so it will greatly increase your chances of becoming a successful candidate for the program. Next acquire and examine the program guidelines for approval, which will provide you with most accurate information on the specific paperwork that should be completed for being considered for loan modification. Submit your application to the bank for approval and you're ready to go.

As the Federal government does offer monetary incentives to lenders who participate in the loan modification program, it is most probable that your bank will be offering this plan to its borrowers. The stimulus plan also offers financial incentive to successful borrowers, to help keep their new modified loan current. According to the plan the bonus can be up to $1000 and it will increase on a monthly basis if the payments are made on time. The bonus may also be added to the mortgage balance for five consecutive years.