To get help right away, click here for more information about the home stimulus package
The Treasury Department has 75 billion dollars set aside to operate this loan modification program. They have a list of banks and lenders who are approved to participate. They receive governmental incentives of $1000.00 each for rewriting existing mortgages for struggling homeowners very much like you. These modified loans will provide a lower house payment so that the homeowner can afford to stay in their homes. They also can forgive late fees, which can pile up and make a bad situation worse!
The home you live in must be your primary residence, where you live more than half the time. It can't be a vacation home, a second home, or rental property. It must have been originally financed on or before January 1, 2009. And, the loan amount can't be more than $729,750. The federal bail-out program only applies to loans that are backed or serviced by Fannie Mae or Freddie Mac.
The main burden of application is to prove two major points to the lender:
You have been the victim of financial hardship. Something has happened to you that you have had no control over that has lowered your income or increased your expenses and you can't make your house payment any more. The house payment must be more than 31% of your gross monthly income. This house payment figure is calculated including property taxes, home owner insurance, and any dues you must pay. This could be job loss, medical bills, divorce, death of a spouse, military service, etc...
You must also establish that you have the means to pay the new, modified payment in the long-term future. You also must convince them that you have the commitment to do that, too.
Both of these issues must be documented thoroughly with the appropriate paperwork. Carefully do all preliminary preparation before contacting your lender. You are only allowed to apply one time, so you want to do it correctly.
