The Federal Housing Finance Agency (FHFA) has released a simplified and streamlined loan modification program to help struggling homeowners afford and keep their homes, thus reducing the number of foreclosures. First you need to know a few simple things about modifications:
Q: What is a loan modification?
A: By definition, a loan modification is a change, revision or adjustment to your loan. The most commonly modified terms of a mortgage are:
Conversion of an Adjustable-Rate-Mortgage (ARM) to a fixed-rate mortgage.
A change of interest rate.
Amortization term
Loan's Maturity date
Unpaid principal balance
The mortgage modifications are designed to enable borrowers to manage their monthly payment obligations.
Q: What is a Streamlined Loan Modification Plan?
A: A streamlined loan modification is a kind of loan reorganization or restructuring that requires less paperwork, and a simple and easy procedure. It aims to help struggling homeowners afford their mortgage payments by setting a benchmark ratio, calculated by their monthly gross income.
Q: What is the mortgage payment benchmark ratio?
A: Due to its essentiality, an industry standard has been agreed upon to help homeowners keep their homes. The benchmark ratio for the calculation of an affordable payment is 38% of the homeowner's monthly gross income. The servicer will move to the next steps once this is determined, such as: extending the loan's term, reducing the interest rate and forbearing interest - until an affordable payment is reached. Otherwise, the situation will be taken into a case-by-case basis using the borrower's cash flow budget.
These are just a few questions of the many that homeowers have. Let us help you, help yourself to get all the answers you need to "Lower your house payment"!
Article Source: http://EzineArticles.com/?expert=Bobby_Tucker
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