The Obama home rescue plan is designed to help you keep your home and stop a foreclosure proceeding. The program is called Home Affordable Modification and is funded by $ 75 billion of stimulus funds. This bailout program is paid for by your tax dollars so don't hesitate to apply for a loan workout using this plan. Banks will be paid by the Treasury Department to modify your loan, so now is the time to get all the information you need so that you can qualify for this home rescue plan.
Home Affordable Modification has standard guidelines and a pre-determined process for application and approval. Once you know this basic information, you will be able to complete your application so that it has the best chance of approval. This means that you should work on your loan modification forms before you call your bank and make any adjustments so that you fit into those guidelines.
The goal of this home rescue plan is to lower your monthly payment so that it equals just 31% of your gross monthly income. This new modified payment is called your target payment-this is achieved by lowering your interest rate to as low as 2%, extending your loan term to 40 years, and even forgiving some of your principal balance.
What do you need to show the bank in order to qualify? You must be able to:
- Prove your income with pay stubs, tax returns, award letters, P & L, or some other form of verification
- Show 2 months bank statements
- Provide an explanation for a financial hardship situation-meaning your income is less or your expenses are higher.
The approval process will involve completing a simple financial statement that details your income and expenses. This will provide your bank a snapshot of your financial situation and also let them know if you fit into the approval guidelines. This is the most important part of your application-what you show on this form will largely determine if you are approved or not. Take the time to get some directions on the right way to complete your form so that you have the best chance of success.