Have you been hit hard by the current economic downturn? Is foreclosure looming in the near future, and you really don’t know quite what to do? It might surprise you to know that the President and your bank do not want you to lose your home. If you qualify, a Bank Loan Modification under the Housing Stimulus Package may help you avoid foreclosure.
President Obama has allocated 75 billion dollars to fund this program. Banks are paid a financial reward of One thousand dollars for rewriting mortgages that are already on the books, but adjusting the loan so the monthly payments are lower. This allows the homeowner to have a chance to avoid foreclosure.
The banks are motivated through this financial incentive, but, in truth, they do not like to do foreclosures. Foreclosures are expensive and time-consuming for them. And, in this economic climate, the homes may sit empty for many months or years. So, the banks do not want you to lose your home.
You might qualify for assistance under this program. If you have experienced financial hardship, you may be partially there! Financial hardship in this instance refers to something happening that lowers your income or raises your expenses, and you have no control over it. You have to prove it with documentation. You also have to make a case for it in a letter called a Hardship Letter.
The flip side of the income coin is that you also have to prove that you have enough income to support the modified payment, and that you are committed to making the payment. Of course, under this program, you are rewarded with one thousand dollars for every year up to five that you are current with your payments!