How Obama's Federal Loan Modification Plan Makes Loan Modification Less of a Problem

Finally change has really come, and it is in the form of Obama's federal loan modification plan. There are $75 billion dollars waiting in the wings for homeowners to make use of and finally get the loan modifications that they require. With the housing market and economy in the state they are in today, there needed to be action taken for the homeowners and families who are in need, and not for the companies and lenders who forced them into the current state of economic decay that they have come to.

The $75 billion dollars is to be put to the lenders, which in turn is to encourage them to be more lenient in approving loan modifications. Obama's federal loan modification plan is speculated by experts to relieve 5 million people of their mortgage troubles through loan modifications and effectively boost the economy as such.

There are special features to this plan than the ways loan modifications were handledand considered in the past:

• The homeowner's current mortgage must be above 105% of the current
• value of the property, or have fallen below 95%, to apply for loan modification.
• Freddie Mac and Fannie Mae loans are now covered by the Home Affordable Modification Program, meaning that loan modification is much more accessible to those under lenders owned by Fannie and Freddie than ever.
• Representatives appointed by the Housing and Development Department are available to help homeowners have their loan modification programs approved. These representatives are free and will help homeowners negotiate loan modification with their lenders. This will effectively cut down on the amount of "do it yourself" loan modification, which is ineffectual most of the time.
• There are several grants now available to first time homebuyers, current homeowners under financial hardship, and even homeowners considering renovating their dilapidated homes.

Thanks to now-lenient home value standards, free Housing and Development Department professions, and grants available, receiving a loan modification is now easier than ever under Obama's federal loan modification plan. The plan has a focus on borrowers and not on lenders, meaning that it is in a homeowner's best interest to apply for loan modification if they are under financial hardship.

However, despite the $75 billion dollars worth of funding, lenders are not completely cooperative with the plan and any loan modification is going to take some work on the homeowner's part. As always, a homeowner needs to show proof of their current income and taxes, and bills; a written letter claiming his or her financial hardship and the details surrounding it, and anything else normally required for a loan modification. Obama's federal loan modification plan is going to help millions, it's just a matter of how fast the lenders approve loan modifications under the plan.

Emma Lanier, "Obamas Loan Modifications Plan", Mortgage Lending Modifications

Jillayne Schlicke, "President Obama's Foreclosure Rescue", Rain City Guide