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Friday, July 17th, 2009

Federal Loan Modification Program Will Help 4 Million

Federal Loan Modification Program Will Help 4 Million

The Obama backed Federal loan modification program that will bring $75 billion for homeowners who are facing foreclosure is said to be able to help a lot of homeowners.

Specifically, the plan is slated to help 3 to 4 million homeowners, and the $75 billion will go directly to homeowners to help them with avoiding foreclosure through loan modifications. Loan modifications or mortgage modifications allow homeowners to drastically reduce their interest rate, drop their principal, and even halt foreclosure proceedings.

he $75 billion in this Obama Federal Federal Loan Modification Plan, the money is being used to lower mortgage interest rates to 3-4% and even in some cases as low as 2%.

For the homeowners to be eligible for a 2% loan modification rate, their total income needs to be equal to 31% of the mortgage price, so this is only for extreme cases where homeowners have either 1) lost their jobs 2) seen a huge increase in interest rates or 3) have a very expensive home.

For homeowners who live in California, Florida, and Washington DC even modest homes were selling for $1 million so its easy for homeowners to get upside down in their mortgage and need help through a loan modification.

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