Using The….

Because of the historically high number of evictions that has thoroughly devastated our economy, several local and federal government programs were developed to help provide relief to homeowners. Many of these programs have been short-lived, but there are still a few hanging around. The most notable is what many call The Obama Plan or the Home Affordable Mortgage Plan. This was a government plan that was supposed to be able to aid foreclosure victims across the nation. It revolved around the servicers helping the homeowners to modify their loan, even if they were upside down in equity.

Typically when being asked to re-write a loan, a mortgage servicer will usually refuse applications when the loan has become up side down. This is an important factor that the government was able to affect. It was an important change, because home values have plummeted everywhere.

So, if rejected once when trying to obtain refinancing from a traditional lender in the past, you may be accepted for a new loan modification. The Home Affordable Modification Program makes provision to the lenders that they would receive their payments. But lenders were never actually required to participate. Some half a million loans were submitted for approval, but figures of approval are reported as low as 2000 cases. Only 0.4% approvals of the total 500,000 applications is pretty discouraging if those calculations are accurate.

In order to go through the plan, your original debt must have originated on or before January 1st, 2009. Two recent pay stubs and the most recent tax return are necessary and you must sign an affidavit of financial hardship.

Besides the debt modification, which will be available only until December of 2012 unless alterations to the current program are made, there is a refinance program that ends in June 2010. There are more alternatives that can help you stop foreclosure as well.

The alternative to applying for a government program is to utilize a private company that has experience working on behalf of homeowners with banks. The Obama Plan was based on an already successful process that lenders were using on a daily basis. debt modifications were far from being a new process and have been happening for a long time. For companies with experience talking with mortgage professionals, receiving a loan modification was very typical. This knowledge in negotiating was completely absent from the governments plan to prevent the foreclosures. Instead, they made their program voluntary and left it up to the lenders to work with the homeowners.

Without doubt, not a good method, since lenders are terrible at working out a solution with the consumer. Lenders and servicers are also under a tremendous amount of financial strain; so the employee with the least experience end up being the person assigned to help the foreclosure victim. The program was flawed from the beginning, which explains such a low success rate.

If you are facing foreclosure, from our experience we propose for you to choose to negotiate with your mortgage servicer on your own for your best possible payment, rather than putting your faith in the government to save your home. We still tell you to apply for The Obama Plan, but just make sure you don’t count on actually receiving it. You must realize the necessity to have a back-up plan; and it would be in your best interest to find a professional to help explore all possible options.


Author: Daddy

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