The Federal mortgage modification “Making Home Affordable Program” recently signed by president Barack Obama begs the question, “who is eligible for a Home Affordable Modification”? Well; if you can no longer afford to make your mortgage payments every month, you just may qualify for the Making Home Affordable Program. Even if you are current on your mortgage, you still qualify. This program is just not for people who are past due or delinquent on their mortgage only, but for those who are having a difficult time meeting their payment every month. These are the five questions you must answer YES to in order to determine if you are eligible for the Making Home Affordable Program as outlined in the bill.

1. Is the home you have the mortgage on your primary residence?
2. Is the amount you owe on your first mortgage equal to or less than $729,750?
3. Are you having trouble paying your monthly mortgage payment?
This may be a direct result from substancial increase in your mortgage payment OR reduction in your income since you got your current loan OR have you suffered a hardship that has increased your expenses (like medical bills)?
4. Did you get your current mortgage before January 1, 2009?
5. Is your payment on your first mortgage (including principal, interest, taxes, insurance and homeowner’s association dues, if applicable) more than 31% of your current gross income? This is your total mortgage payment divided by your gross monthly income.

If you answered YES to all questions then you are eligible, but your servicer (place where you send your monthly payments to) can only say if you do indeed qualify. In order to fully qualify you must be able to exhibit that you have enough monthly income to meet the new revised lowered payment on a continual basis and that the loan modification was the best course of action for you based on the details of your home value and the distinguishing aspects of your present mortgage. In other words if you must have some type of income coming in to cover the new revised mortgage payment otherwise there is no use in revising your mortgage in the first place. In fact; if you cannot meet the new lowered revised payment in the first three months after your mortgage was modified, then your Making Home Affordable revision is reversed by your servicer.

Your servicer will try to get your housing debt ratio down to 31% of your total monthly income by either lowering your interest rate, lengthening the term of your loan to 40 years and/or reducing your principal balance. They can do all three if neccessary and they will receive federal assistance to if they modify your loan.

The Federal mortgage modification “Making Home Affordable Program” is president Obama’s plan of action in order to get the housing market back on track. With the Making Home Affordable Program, up to 9 million American families may be eligible to refinance or modify their loans to a payment that is affordable right now and for tomorrow.

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