Article from Mortgage11.
The indebted homeowners of the USA view the Obama loan modification plan as the last resort before filing bankruptcy. So much is the expectation from this loan modification plan that its success is going to be the barometer of the popularity of President Obama and sure to affect the next presidential elections too.
The current economy is gripped by the recession and has sent the property prices plummeting. The income of the home owners has reduced and maintaining the standard of living has become very expensive. The monthly payments of the mortgage that were once affordable have now become exorbitant. It is in these circumstances that the Obama home loan modification plan has brought some hope to the distraught home owners. To avail the benefits of this modification the debtor needs to know something about it and especially the requirements to qualify for it.
The technicalities of the Obama loan modification plan include reduction of the monthly payments to 31% of the gross income of the debtor, reduction of monthly mortgage to 38% of the borrower’s gross income by the firm that offers loan service, the duration of the repayment can be prolonged to 40 years and the applicable rate of interest may go as low as 2%.
Some of the prominent issues for qualifying for this mortgage loan modification plan include that the residence should be the prime residence of the applicant, the first loan should have been availed before January 1, 2009, the debt should not exceed $729,750, the debtor has to justify with proof that he/ she is facing financial hardship and incapable of continuing the current monthly payment, submit the latest income tax returns along with the salary or income stubs (slips). It is always better to avail the services of a facilitator like the www.refinancitt.com to qualify and increase the chances of the approval of the Obama home loan modification plan. The verification process for availing this assistance is very strict.
In order to promote the availing of the Obama mortgage loan modification plan the government has declared a range of incentives for both, the applicant as well as the service provider (facilitator) of this scheme. These incentives primarily depend on the regularity of the monthly payment as committed by the borrower. The incentives can range up to $1000 annually.
Getting a subprime, or non-conforming mortgage, just got a lot harder. Wells Fargo, the third-largest bank in the U.S., announced it is closing a division devoted to issuing what they call “non-prime” mortgages, car loans, and credit-card loans. The bank will no longer issue subprime loans and is eliminating 3,800 related jobs. Wells Fargo was one of the leading mortgage lenders during the last housing boom.