The New Federal Mortgage Modification Home Affordable Program Qualifications
One common question asked in regards to President Obama’s new federal mortgage modification home affordable program is:
I owe more than my house is worth. Will a Home Affordable Modification reduce what I owe?
The answer is: the primary objective of the Making Home Affordable Program is to help borrowers avoid foreclosure by modifying troubled loans to achieve a payment the borrower can afford. Investors (lenders) may, but are not required to, offer principal reductions. It is more likely that your servicer will use interest rate reductions in order to make your payment affordable. The interest rate reductions can be as low as 2%. Also; the lender may extend loan terms up to 40 years to. All three of the above can be instituted if the lender choses to do so.
To see if your eligible for the New Federal Mortgage Modification Program you first have to answer yes to five qualifying questions. This can be done at the Making Home Affordable website. If you do, then you call the lender to see if they are set up to participate in the program. Many lenders are slow to start up their home affordable modification programs. This may be because it’s so new and unconventional from any other program they ever had.
