In the face of the floundering housing market, the Obama Administration is implementing a loan modification program that should solve most of the major problems with the industry. Foreclosures should level off with the help of this program.
The recent economic downturn has had a profound effect on the housing market, and rates are falling like a stone. Because of this, lenders might find foreclosing on a home to be vastly undesirable, especially if the borrowers want to take out a mortgage. As a result, another option for foreclosure is needed, in the form of this loan modification program that should help homeowners.
To leave no stone unturned, the program aims at providing the best possible option to the debtors (homeowners). A whopping amount of about $75 billion has been allocated to this loan modification program. Although, there's a big risk involved, this program is perhaps the best way to answer the current financial problems of the U.S.
This loan modification program is effectively planned and has more advantages as compared to similar programs that were exercised in past. Going by the adage that "Loan modification is better than home foreclosure," this plan aims at allowing the struggling debtors to stay in their properties.
Even the lenders come out winners on this loan modification program if they decide to invest in it. There are cash incentives for these lenders to receive. In the program, a lender gets a $1,000 cash incentive per loan modification, being maid $1,000 annually for the next three years, providing plenty of cause to play ball.
The most important benefit of this home loan modification program on the part of homeowners is that, they will have to pay monthly installments at a reduced interest rate. This means, they will not have to pay more than 31% of their total monthly income.
If the homeowner takes advantage of the loan modification program, they'll be able to take $1,000 off their principal annually for five years, which is of great advantage to these struggling debtors. Participation in this program, however, requires consistent, timely monthly payments to their lender.
If the value of a homeowners home has dropped by at least 15%, this program give the option of refinancing the home to a loan with a fixed rate of 4.5%. This is a very beneficial part of the loan modification program for the person who purchased his/her home during a housing boom, and is now suffering from the housing recession.
Thus, this loan modification program not only allows the homeowners to pay their monthly installments at a reduced interest rate, but also gives them an extended time to repay their debts.
With this in mind, Obama's loan modification program is sure to assist both struggling homeowners and the mortgage lenders.
The recent economic downturn has had a profound effect on the housing market, and rates are falling like a stone. Because of this, lenders might find foreclosing on a home to be vastly undesirable, especially if the borrowers want to take out a mortgage. As a result, another option for foreclosure is needed, in the form of this loan modification program that should help homeowners.
To leave no stone unturned, the program aims at providing the best possible option to the debtors (homeowners). A whopping amount of about $75 billion has been allocated to this loan modification program. Although, there's a big risk involved, this program is perhaps the best way to answer the current financial problems of the U.S.
This loan modification program is effectively planned and has more advantages as compared to similar programs that were exercised in past. Going by the adage that "Loan modification is better than home foreclosure," this plan aims at allowing the struggling debtors to stay in their properties.
Even the lenders come out winners on this loan modification program if they decide to invest in it. There are cash incentives for these lenders to receive. In the program, a lender gets a $1,000 cash incentive per loan modification, being maid $1,000 annually for the next three years, providing plenty of cause to play ball.
The most important benefit of this home loan modification program on the part of homeowners is that, they will have to pay monthly installments at a reduced interest rate. This means, they will not have to pay more than 31% of their total monthly income.
If the homeowner takes advantage of the loan modification program, they'll be able to take $1,000 off their principal annually for five years, which is of great advantage to these struggling debtors. Participation in this program, however, requires consistent, timely monthly payments to their lender.
If the value of a homeowners home has dropped by at least 15%, this program give the option of refinancing the home to a loan with a fixed rate of 4.5%. This is a very beneficial part of the loan modification program for the person who purchased his/her home during a housing boom, and is now suffering from the housing recession.
Thus, this loan modification program not only allows the homeowners to pay their monthly installments at a reduced interest rate, but also gives them an extended time to repay their debts.
With this in mind, Obama's loan modification program is sure to assist both struggling homeowners and the mortgage lenders.
About the Author:
Anthony Flores is a recognized authority in debt settlement software technology and http://www.modificationnetbranch.com.Visit our site to see if you qualify for loan modification today!
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