The recent past has seen a large, if not record number of homes fall into default and mortgages get behind. Finding a way to get back into reasonably sound financial health and to keep your home is on your mind consistently if you're one of these people. "I can't afford my mortgage" is probably uppermost on your mind. If you have gotten behind in your mortgage payments and are one of those people thinking, how can I lower my mortgage payments, and would like to keep your home as most of us would, consideration of the various methods available to you should be undertaken immediately. Getting a solid and realistic view of your finances, what you can and cannot afford is the first step toward getting a loan mortgage payments lowered.
The government program is called HAMP, this stands for Home Affordable Modification Plan. Funded by $75 billion dollars in stimulus funds, banks are being encouraged and actually paid by the Treasury Department to offer lower loan terms to those homeowners who can meet the basic approval requirements. Here is a checklist of important things you need to know about this home saving option:
HAMP requires that participating lenders ( not all mortgage lenders participate) reduce monthly payments to no more than 38 percent of the homeowners' gross income and then the government puts in the difference to bring payments down even more to just 31 percent of the homeowners' monthly income. To get down to the 31 percent point, the lender first reduces the interest rate to as low as 2 percent. If that's not good enough, then the terms of the loan may get extended up to 40 years. Lenders are not required to reduce the mortgage principal. If accepted into the program, there is a 3 month trail period to make sure the homeowner can handle this new payment. Sounds like a wonderful opportunity for struggling homeowners - right? Well it doesn't seem to be working all that well.
A lot of people feel that the Making Home Affordable Program is just a band aid - that it's not really going to fix anything and it's just putting off the inevitable. Just recently the Office of Thrift Supervision (OTS) released statistics on loan modifications. (The OTS is an office within the Dept of the Treasury and is the federal bank regulator of savings associations and their holding companies throughout the US). What they found was that more than half of all modified mortgages defaulted again within six months. And according to a treasury report released in August about 630, 000 who tried to get assistance in having their monthly payments lowered were kicked out of the program by the end of July 2010. That translates to the program not working for about 48% of homeowners since March of 2009.
Really, it's not a mystery why and how almost a million homeowners have already been helped under the HAMP loan workout program. There is a basic formula that the Treasury Department has implemented and each lender uses this formula. Use a software program that mimics this same formula when you prepare your financial statement and you will be certain that your budget fits into the approval guidelines. And you will know ahead of time if you might need to make some minor adjustments to your budget-before your lender has a chance to decline your application. Do it right the first time and get back on the road to secure home ownership.
The government program is called HAMP, this stands for Home Affordable Modification Plan. Funded by $75 billion dollars in stimulus funds, banks are being encouraged and actually paid by the Treasury Department to offer lower loan terms to those homeowners who can meet the basic approval requirements. Here is a checklist of important things you need to know about this home saving option:
HAMP requires that participating lenders ( not all mortgage lenders participate) reduce monthly payments to no more than 38 percent of the homeowners' gross income and then the government puts in the difference to bring payments down even more to just 31 percent of the homeowners' monthly income. To get down to the 31 percent point, the lender first reduces the interest rate to as low as 2 percent. If that's not good enough, then the terms of the loan may get extended up to 40 years. Lenders are not required to reduce the mortgage principal. If accepted into the program, there is a 3 month trail period to make sure the homeowner can handle this new payment. Sounds like a wonderful opportunity for struggling homeowners - right? Well it doesn't seem to be working all that well.
A lot of people feel that the Making Home Affordable Program is just a band aid - that it's not really going to fix anything and it's just putting off the inevitable. Just recently the Office of Thrift Supervision (OTS) released statistics on loan modifications. (The OTS is an office within the Dept of the Treasury and is the federal bank regulator of savings associations and their holding companies throughout the US). What they found was that more than half of all modified mortgages defaulted again within six months. And according to a treasury report released in August about 630, 000 who tried to get assistance in having their monthly payments lowered were kicked out of the program by the end of July 2010. That translates to the program not working for about 48% of homeowners since March of 2009.
Really, it's not a mystery why and how almost a million homeowners have already been helped under the HAMP loan workout program. There is a basic formula that the Treasury Department has implemented and each lender uses this formula. Use a software program that mimics this same formula when you prepare your financial statement and you will be certain that your budget fits into the approval guidelines. And you will know ahead of time if you might need to make some minor adjustments to your budget-before your lender has a chance to decline your application. Do it right the first time and get back on the road to secure home ownership.
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