Obama's Loan Modification Agenda - Qualifying for the new Federal Loan Modification Plan

The Obama administation's loan modification program offers a never before seen $75 billion to help up to 5 million homeowners. You may qualify for help if you are struggling to pay your mortgage each month, if you have been late on your payments, and if you fear you may face foreclosure in the future.

Under Obama's new plan, the rules have changed. Those who were previously turned down by mortgage lenders may now be eligible for help. All participating banks must review the situation of those who ask for help. Being behind on your mortgage is no longer necessary. You just need to assemble paperwork to show that can you could be at risk of falling behind and facing foreclosure. You must show that you are facing hardship stemming from factors such as job loss, high interest rate, or increased expenses.

There are some factors that you should consider to determine your eligibility for assistance under the new program:

- the mortgage is on the home you live in

- that you owe less than $729,750

- that your payments, excluding taxes and insurance, are over 31% of your gross income

- that you took the loan out before January 1, 2009

After making sure the above requirements have been met, be sure you complete all required paperwork. Your bank will need proof of income and expenses and full disclosure is neccessary. The bank will assess each applicant on a case-by-case basis.

Homeowners who are interested are advised to gather necessary paperwork and start the application process ASAP, as lenders may be inundated with loan modification requests. The program is free of charge. However to increase your approval chances you should be sure all your paperwork is in order and complete. Proper documentation will aid the process in moving quickly. With lower monthy payments a a goal, take the time to do things right the first time.

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