Obama's MHA Loan Modification and Refinance Plan - You'll Never Qualify For it Without This

While there are several guidelines to meet in order to qualify for a loan modification under Barak Obama's new mortgage plan, there's one thing ALL lenders are looking for -- and if you leave this out you'll NEVER qualify for a loan.  It's that important.

The #1 Thing ... Without It You're Toast

When applying for a loan modification under President Obama's MHA plan, most people focus on making sure they have a good explanation for why they've fallen behind on their payments.  And that's not bad, because they should.  The best way to convey what caused you to get behind  is to create a well written hardship letter.

But that's not the most important thing - not the #1 thing your lender or loan servicer needs to see.

Without a doubt the most important thing you're going to need to do is to assure your lender - or better yet prove to them - that if they modify your loan you'll be able to meet the terms of your new agreement.  They need to be confident the problems which caused you to get behind were temporary problems which have been solved.  They need to believe that going forward is a low risk for them.  Which means you've got work to do.

How To Make Sure You're A Good Candidate For A New Loan Approval

There are a number of ways to prove to your lender that you'll be able to meet the terms of a modified loan.

First, with a well written hardship letter. The hardship letter needs to convey that:

You recognize you haven't fulfilled the terms of your original contract and you are committed to paying off your loan.
The reason(s) you fell behind.
Why the situation was temporary, i.e., why if given the opportunity to -- you'll now can be able to meet the terms of a new agreement.
Your proposal which states what you can reasonably take on backed up with the reasons why.
Prove it (facts and figures).

Second, proving it with facts and figures.  Here is what you'll need:

All sources of monthly income, with total amounts.
All sources of monthly expenses and debt.
The ability to achieve a debt to income ratio of 31% with the help of the lender and the government under Obama's new MHA plan.

In summary, it's up to you to decide if keeping your home is worth the effort.  If you believe it is, the government and your lender will work with you to help make it happen.

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Does Obama's Home Loan Modification Program Actually Work?

According to the report, one of the main objectives of the plan was to provide beneficial home loan modification facilities which would help troubled American homeowners to redeem their mortgage loan in a more comfortable manner through reduced interest rates and lowered monthly installment payments.

The plan is specifically designed to address the mortgage delinquency levels and provide opportunities for money lenders to offer effective loss mitigation programs to prevent further foreclosures from taking place. The main idea is to help 3 to 4 million Americans keep their homes, and lead a less stressful financial life. However, there are varied results and opinions which often contradict each other regarding the effectiveness of the HAMP program. The article tries to discuss the loan modification program's success amongst the mortgage debtors.

The basic question asked by many concerned Americans today is whether the loan modification plan is actually working, and whether stats support the claims and promises put forward by U.S. President Barak Obama prior to his presidency. As per the report submitted by the Treasury Department in November 2009:

The total number of notices sent by the moneylenders to mortgage loan defaulters is 3.137 million, and these debtors are potentially eligible for the Obama loan modification program.
The trial period plan offering the HAMP facilities is to be extended, and the plan should be made more effective, since only 33 percentages of the total 3.137 million are eligible, or likely to qualify for the existing plan conditions.
Till date only 759,408 or 73 percent of the total number of trial HAMP home loan modification applicants have been able to avail the program benefits and able to retain their homes.
The basic objective of the HAMP plan is to prevent mortgage debtors and delinquents from filing for bankruptcy and avoiding foreclosures. However, during the three-month trial period only 30,650 or 4 percent of the total applicants were provided the much required facilities.
Totally only 31,382 or 4 percent of the total number of HAMP applicants ended up receiving a permanent loan modification.
Out of a total of 3 to 4 million possible HAMP applicants, looking at the current rate of individuals actually preventing the foreclosures, the federal and state governments need between 2,968,618 to 3,968,618 more successfully loan modifications to sustain the Obama plan.
During the HAMP trial period, the applicants have to be consistent in making at least three of the "modified monthly payments" on time, to reap addition benefit of the program. It is possible for the trial applicants to avoid the foreclosure only if they adhere to the HAMP plan for a longer time. According to the report, 360,165 trials were started in the month of August 31, 2009. For further analysis of the HAMP plan, the experts say they need some additional data coming up in the coming months to give a more accurate picture about how successful the HAMP program is likely to be.

The HAMP plan sounds great as far as federal loan modification is concerned, and theoretically speaking the vast majority of the mortgage defaults should benefit through the plan. However, the report submitted by the Treasury Department highlights certain facts which need to be properly addressed to for sustained success of the Obama initiative plan. The article tries to discuss some of the salient features of the treasury report. Visit http://www.refinanceitt.com for more information about it.

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