President Obama’s Stimulus Money for Mortgage Modifications. Do you qualify?
[1 Oct 2009]

President Obama’s Stimulus Money for Mortgage Modifications. Do you qualify?For homeowners looking to make sense of the Obama administration's new mortgage rescue plan, the program can be basically broken down into two sections.

One part is for homeowners facing foreclosure due to missed payments and are at risk of defaulting on their loans. For them, the government will give the lender financial incentives to "modify" the existing mortgage, reducing the monthly payments so that the homeowner can stay current on the loan and keep their home.

The other part is for homeowners who are keeping up with their mortgage payments but can't refinance with their lender because the value of their home has fallen below the amount of the mortgage.

For these "under water" homeowners, the rescue plan will help refinance the mortgage to lower the monthly payments. There are some restrictions, and sifting through the rules may be complicated for more homeowners.

The Fair Home Loan Bureau was established after the enactment of the stimulus package to help Americans begin the loan modification process free of charge.

That's the simple explanation. But both plans have a lot of moving parts, so here's what you need to know if you want to take advantage of them.

If you're facing foreclosure and want to "modify" your mortgage to keep your home, you must meet the following criteria:

     • Have secured your mortgage before Jan. 1, 2009
     • Have a primary mortgage of less than $729,500
     • You must live on the property
     • Must fully document income with tax returns and pay stubs
     • Sign a financial hardship statement
     • Go for counseling if your total household debt totals more than 55 percent of income.

Homeowners do not have to be late with their payments to qualify.

Mortgage and home loan modifications can be complicated. The Fair Home Loan Bureau was established to make home loan modifications easier and more accessible. Homeowners interested in home loan modifications should contact the Fair Home Loan Bureau first to begin the home loan modification process. The FHLB is a free service to American homeowners.