Loan modification: Obama foreclosure prevention program

Now, there is a new federal program by the new President Barak Obama in March 2009 and Congress is working on that to make it a law. This $75 billion loan modification plan provides incentives to borrowers and loan servicers and investors to spur mortgage modifications. The government also subsidizes interest rate reductions to get borrowers to affordable monthly payments. It focuses on people who are behind in their payments or are at risk of default. To those borrowers who are default at mortgage payments, it helps them by loan modification so their payments are no more than 31% of monthly gross income. To those borrowers who haven't missed a payment can refinance into lower-cost loans even if they have little or no equity. It is effective until the end of 2012, but your loan can only be modified once.

To qualify for this program, you must: Read more

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