How The Home Affordable Loan Modification Program Can Help You Keep Your Home

The Obama loan modification program was recently announced with the idea that it plans to spend $14 billion to extend its Home Affordable loan modification program and help more homeowners, particularly those who are currently unemployed and other sectors to whom the services were previously unavailable.

The project aims predominately to allow these borrowers to refinance their underwater first mortgage (those homes whose market value is less than the amount that is owed on them), as well as allow unemployed owners to get temporary loan modifications lasting anywhere between three to six months. This refinancing program is also going to be specifically designed to reach those whose credit scores have been lowered as a cause of default on their existing mortgages. Borrowers with credit scores as low as 500 will be capable of qualifying for assistance with a loan modification program.

Many experts have actually applauded the change to the home affordable loan modification program, stating that it can put the sluggish loan modification program into a lot more use. Chief economists state that the program can help upwards of 1.5 million homeowners keep their homes and may even help end housing crisis. Not everyone agrees with this, however because it may actually take months to implement as banks will have trouble executing all the changes.

Since the Obama loan modification program was introduced last year, it has fallen just a little bit short of its goal of helping anywhere between 3 to 4 million homeowners. Currently, around 6 million homeowners are at least two months behind on their mortgage, and the mortgage defaults only continue to rise in most major cities. The government has recently made additional modifications to the program in order to include second mortgages, which have kept quite a few borrowers from getting help.