President Obama loan modification plan is designed to assist millions of struggling homeowners in America to keep their homes safe. Owing to the ongoing bout of economic downturn, many households have been badly hit on account of either job loss or drastic cuts in monthly incomes. Nevertheless, the primary objective of the federally backed Home Affordable Foreclosure Alternative is to make homes more affordable to distressed house makers.

President Obama’s loan modification plan is designed to assist millions of struggling homeowners in America to keep their homes safe. Owing to the ongoing bout of economic downturn, many households have been badly hit on account of either job loss or drastic cuts in monthly incomes. Nevertheless, the primary objective of the federally backed “Home Affordability and Stability Plan” is to make homes more affordable to distressed house makers. To that effect, the government is committed to providing a $75 billion stimulus package to support the housing market. As part of the HASP, the federal government would offer incentives worth $1,000 to home mortgage loan lenders, who approve homeowners for mortgage modification program for the first three years provided the borrower maintains regularity in paying the modified monthly home mortgage installments.

The Obama stimulus program has two different components and its basic purpose is to help homeowners to save their homes from possible foreclosures. Here is some crucial information pertaining to the Making Home Affordable Plan which could guide you in your endeavor to save your home.

1. Home Affordable Modification Program (HAMP)

The “Home Affordable Modification Plan” (HAMP) allows a house maker to get existing home mortgage loans modified so as to ensure that monthly mortgage payments become more affordable. As per guidelines of the HAMP program, the monthly mortgage installments cannot exceed 31% of the borrower’s gross monthly income. To meet this requirement, a loan modification lender might consider any of the below mentioned alternatives or even provide a combination of these.

• Reduction in mortgage rates
• Extension of the loan duration, or
• Principal forgiveness or deference.

Borrowers who qualify for the HAMP loan modification and stay current on their mortgage payments are entitled to receive $1,000 as incentives for each year up to the first five years. This amount is subtracted from the principal loan balance.

2. Home Affordable Refinance Program (HARP)

The Home Affordable Refinance Program (HARP) is aimed at assisting homeowners who have witnessed a fall in their housing prices and intend to keep their homes safe by providing mortgage refinancing loans at much reduced rates of interest. But to be eligible for the HARP, the value of the current mortgage loan has to be more than 80% of the home’s market value.

3. Important Guidelines for the HAMP loan modification

To avail a mortgage modification under the federal loan modification program, you need to satisfy the following conditions.

1. The existing mortgage loan should have been sanctioned prior to or on 1st January, 2009.
2. The home to be mortgaged has to be the primary residence of the loan modification applicant.
3. The value of the current home mortgages cannot exceed $729,750 for a single unit residence.
4. The applicant needs to furnish a letter of financial hardships along with valid reasons.

An expert guidance and active assistance could be of immense help when you are actually out to apply for a home mortgage modification under the Obama plan. Therefore, if you are considering applying for a Bank of America loan modification, it is recommended to utilize the professional services of reputed online service providers like LoansStore.

Just check out if you can qualify for the federal loan modification program today!