The U.S economy has turned into a recession increasing the amount of jobless claims and homeless rates.

Barack Obama has figured out a way to reduce the foreclosure rate by offering loan modification to the people that are not able to pay their mortgage payment.

President Obama designed the Homeowner Stability Loan Modification plan to help homeowners reduce their monthly mortgage payment.

How it Functions?

1. Interest rates and cap:

The homeowners loan will be allowed a 2-6 % interest rate based on the homeowners qualifications. Sometimes reducing their monthly payment by 20-40%.

2. Loan principal reduction:

If the loan qualified for principal reduction under the Obama Loan Modification plan, the principal balance will be reduced and brought forward when the market turns around.

3. Reduced monthly payments.

Your lender will help to assist in reducing the monthly payments.

The loan modification plan states that the lender cannot lower the mortgage payments to less than 38% of the Debt to income (DTI) ratio. The administration will further try to revive the interest rates to 31% of the DTI ratio.

4. Introduction of incentives:

The homeowner stability plan provides lenders with a $1000 incentive to reduce their mortgage payments and qualify them for loan modification.

In addition, $1000 will be reduced from the homeowners principal, if the debtor continues with the plan. The prime purpose behind this is to help homeowners to refinance their loans.

5. Loan Modification performance:

The decrease in principal is an added benefit to this loan modification plan. This principal reduction can result in a reduced principal balance of 2-15% of the current home market value.

It is recommended that the homeowner keeps all paperwork in so they are completely aware of what it is that they signed.

Obama’s homeowner stability plan has assisted thousands of people reduce their home loans.Get Started by using the link below for a free consultation in loan modification.

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