- 1). Eligibility: You don't need to be behind on your mortgage payments to be eligible for a modification. If due to decrease of your income or lose of job, you are not able to continue payments and are at risk of default, you may benefit from the plan.
- 2). Qualification: for loan modification, the property must be your primary residence; your current monthly mortgage has to be higher than 31% of your gross income. Your loan must be under the current Fannie Mae and Freddie Mac conforming limit. Check with your lender on March 4, 2009 for details.
- 3). Multiple Units Owners: If you have a mortgage on a property up to 4 units, as long as you live in one of the units as your primary residence, you are eligible for a modification.
- 4). Principal reduction: If you owe more than what your house is worth, the program offers incentives to lender for principal reductions at your lender's discretion. Lenders are likely to lower payments mainly by reducing loan interest rates. Make deals with your lender to push for principal reduction.
- 5). Timely pay reward: There will be a $5000 reward for making timely payments for 5 year after your modification. The amount will be applied to reduce your mortgage debt at end of the fifth year.
- 6). Beware of scams: There is no cost to modify your loan under the HASP. Stay away from solicitations to modify your loan for a fee in advance. If you need assistance, contact a HUD approved housing counseling agency.
- 7). Fight for your chance: Even though lenders participate in the program on a voluntary basis and modifications are evaluated on a case-by-case basis. With the substantial incentives offered by the government, most lenders are expected to participate. Keep your fingers crossed. If you do not receive any letters from your lender after March 4, 2009, give them a call. Expect the line to be busy.
- 8). Things needed:
Recent Tax returns
Evidence of additional income
Info on second mortgage if any
All credit card debt and loans
- 9). If your home is already scheduled for foreclosure soon, Contact your mortgage servicer or credit counselor. Many mortgage lenders have expressed their intention to postpone foreclosure sales on all mortgages that may qualify for the modification in order to allow sufficient time to evaluate the borrower's eligibility.
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