President Obama’s stimulus package contained 275 billion dollars allocated to a Mortgage Modification Program to stem the tide of foreclosure and rescue the quickly declining housing market. Over 4 million homeowners will obtain these modified loans. What benefits are available to qualified homeowners?

- Reduced Interest rates as low as 2%.
- Extended loan terms, possibly to a 40 year loan.
- Lower, more livable monthly house payments.
- Waived late fees.
- Possible reduction of principal, if necessary, to arrive at a lower monthly payment.
- Most importantly, getting to stay in your home.

You probably are thinking that this Mortgage Modification Plan sounds too good to be true, but if you qualify, this help may be available to you.  Lenders are being encouraged to help homeowners rework the terms of their loan by financial incentives, so it may be easier than you think.  How do you know if you qualify?

- First, and foremost, the home must be your primary residence.  That means you must live there.
- Your original mortgage must have been written on or before January 1, 2009.
- This loan has to be backed by either Fannie Mae or Freddie Mac.
- The total loan amount must be no more than $729,750.
- Your house payment, homeowner’s insurance, property taxes and homeowner’s dues must be MORE than 31% of your gross monthly income.
- You must document that you are in financial hardship and show documentation that explains the cause and events that caused your delinquency.
- You must also convince the bank that the new, adjusted payment would be very achievable for you and that you would be very glad to get a fresh start.

You will need to fill out an application and provide all documentation necessary.  You also will be required to compose a Hardship letter, which will explain your financial situation to the lender.  It is of utmost importance that this application package be correctly compiled before you approach your lender.  Only one loan modification can be done on a loan under the 2009 Mortgage Modification Program, and only one application can be done, so it needs to be right the first time.