Checklist to Get Approved For Federal Loan Modification Program

The basic objective of the federal loan modification program is to help distressed borrowers save their precious homes from foreclosures, by reducing their monthly mortgage payments and making them more affordable. The plan, which is supported by a $ 75 billion stimulus package, seeks to assist house makers who are either at default or facing the risk of defaulting in remitting their existing home mortgage installments. But to avail the benefits of the federal scheme it is imperative for borrowers to satisfy certain conditions stipulated by the guidelines of the "Home Affordable Modification Program" or HAMP. Hence, one needs to have proper information regarding the advantages, qualification criteria as well as the application process to be eligible for a loan workout under the government aided program.

The Checklist For Getting An Approval Under HAMP

Benefits offered by HAMP

• Much lower monthly mortgage payments.
• Waiver of late payment fees.
• Significantly reduced rates of interest.

Conditions for qualification

To be eligible for the Obama loan modification plan, applicants are required to meet the below mentioned requirements.

• The home should be your primary residence and not an investment property.
• The current home mortgages should have been sanctioned prior to 1st January, 2009.
• The value of the existing mortgage should be less than $729, 750.
• Your current mortgage payments should be more than 31% of your gross monthly income.
• The financial hardships faced need to be documented along with the reasons.

Process of application

When considering applying for Obama's Home Affordable Modification Program, borrowers must contact their first mortgage loan lenders and ask them to be considered for a loan modification. While making an application, you must keep the following documents ready.

• Prepare a letter of financial hardships.
• Get a copy of latest financial statements along with details of income and expenditures.
• Borrower's report has to be completed.
• To provide proof of regular monthly income you are required to submit 2 copies of recent pay stubs and a copy of the last tax returns.
• You should get bank statements for the last 2 months.

Additionally, to get approved for a loan modification plan under the HAMP

• You need to check out how much you can afford to pay each month by using the program guidelines.
• To determine this, calculation of debt ratio is must.
• Formulate your monthly financial budget by making adjustments in the financial statements so that you know the exact amount of disposable income available to meet the new monthly mortgage payments.
• Your proposal package should be complete and accurate. Submit it to your lender along with the application.

Use reputed online professional services like www.Refinanceitt.com that employ qualified and highly experienced loan modification attorneys. By availing such help you could get proper guidance and active assistance in preparing the legal documentation which is very much required when applying for a federal loan modification. Besides, by doing so you could save a lot of time and obtain an early approval for a loan modification.