There is a great deal of interest to the new loan modification program created by the Federal Government. Unfortunately, some parts of the media has resorted to taking it apart, seemingly forgetting about the five or six million families who will be able to keep their homes from going into foreclosure because of it. Although there have been similar programs in the past that have failed, this particular plan has been changed for the better. Also, considering President Obama's evident way of working, this looks more certain than any of the previous ones.
The eligibility requirements are slightly different and so is the formula to calculate monthly payment options for this program. To qualify, there must be proof of a desperate financial situation and the inability to pay the mortgage payments on a loan taken out for the primary residence before January 2009. Also, the amount owed on the loan principle cannot be more than $729,250 on a one-unit home and somewhat higher on homes with more units.
As for the change in formula, it has been made so that monthly payments cannot exceed 38% of the family's gross monthly income. There will also be a 2% reduction of interest on these payments. After three months worth of modified loan payments, there will be a $1000 deduction from the principle amount, paid instead by the Federal Government. If need be, there is also the option of extending the mortgage payment plan to up to 40 years.
For some families, this could mean the saving of their homes. Anyone looking for accurate information can find it on the United States Federal Government website. All of the news releases and the application processes are there.
***Update***
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