Homeowners stuck with high mortgage payments could get the relief they need to stop foreclosure under the federal government stimulus plan that features loan modification help.  This plan is subsidized by the TARP funds and is aimed at helping 5 million borrowers find a solution to stay in their homes.  So just what does it take to get some of that bailout money assistance from your lender?  Here are some details of the program and how to apply and increase your chances of qualifying.

Learn the Basics:

Name of plan: Home Affordable Modification or HAM for short.  Most of the larger lenders and servicers are already approved to offer the program to their eligible borrowers.  Those banks still awaiting approval from the feds are accepting applications from interested borrowers.  Once approved, participating lenders are able to take advantage of incentive payments that actually reward them for each loan modified using the plans parameters.

Who can apply: Homeowners facing a financial hardship situation and who live in the home as their primary residence are encouraged to contact their lender and ask to be considered for HAM.  You will also be asked to provide proof of your income and assets to verify that your current mortgage payment (including the costs for property taxes, homeowners insurance and any homeowners association dues) equals more than 31% of your gross monthly income.  Your loan has to have been taken out before January 1, 2009 and have a balance of less than $729,750 (multi units can be higher)

Federal Government Loan Modification Plan benefits:  The goal of this program is to reduce the borrowers monthly mortgage obligation to equal just 31% of their gross monthly income.  Once a homeowners begins the application process, participating lenders have agreed to forestall any foreclosure proceedings while the application is reviewed for eligibility.  The long term benefit is an affordable and sustainable mortgage that will encourage the borrower to stay in their home and continue making payments each month.

Stimulus Plan Loan Modification Terms:  The plan calls for a standard method of modifying loans to reach the target payment.  Participating lenders are required to use these methods in order to receive the monetary incentives from the Treasury Department.  First, the interest rate will be reduced to as low as 2%, next the term may be extended to 40 years, and finally some of the principal balance may be deferred or forgiven in order to reach the 31% target mortgage payment.

Learn the Guidelines to Qualify:  Since the approval criteria is standard for everyone, it pays to learn exactly what the lender is looking for on your paperwork in order to approve your application.  If you can adjust your budget correctly and provide all of the required paperwork in a complete and accurate package, you have a very good chance of qualifying for this aggressive loan modification plan.  Now is not the time to slap something together and hope for the best.  Over 150,000 borrowers have already gotten approved, you can too when you take the time to learn and prepare.

APPLICATION TIP:  Do not contact your lender and give them your financial information until you have taken the time to work on your budget and completed your forms ahead of time.  This is critical if you hope to be able to prove in black and white that you meet the approval guidelines.  You do not want to be stumbling around with the bank on the phone trying to guess at the right answers!  Make sure you complete your loan modification forms correctly-take advantage of the step by step directions in Chapter 2 of the #1 resource guide for homeowners, The Complete Loan Modification Guide.  It’s the inside edge you need to be successful when dealing with your lender.

You can get the help you need to apply & qualify for the Stimulus plan loan modification by ordering and downloading the best selling handbook for homeowners, The Complete Loan Modification Guide. This is a low cost, easy to read home edition loan mod kit that will provide you with everything you need to prepare a professional and acceptable loan modification application. You are provided with all of the necessary forms and given detailed directions on how to complete them properly. The Complete Loan Modification Guide will take you step by step through calculating your debt ratio, completing the financial statements, writing your hardship letter and then putting it all together to submit to your lender. Learn how to apply and qualify for the Obama federal program too. Get started today on the path to secure home ownership, order and download The Complete Loan Modification Guide. For more information about mortgage loan modification, please visit us at: http://www.myloanmodificationcenter.com