| Facing a financial hardship situation and unable to | | | | household income. Spouse, roommates, children who |
| afford your mortgage payments? The Obama loan | | | | pay rent-are all included in your gross household |
| modification plan may be the answer you need. But | | | | income. The current mortgage payment must be |
| first you will have to pass a screening to determine if | | | | calculated to include your loan payment, plus the |
| you are a good candidate for this program. You will be | | | | monthly property taxes, monthly homeowners |
| asked some questions, and your answers will help | | | | insurance, and monthly homeowner association dues if |
| your lender decide if you are qualified. Here is some | | | | applicable. So make sure to take your annual property |
| information to help you understand the Obama | | | | tax bill and homeowners insurance bill and divide them |
| questionnaire. | | | | by 12-then add that to your loan payment. The total of |
| Loan Modification Program Questions: | | | | all those figures must be more than 31% of your gross |
| | | | income. |
| 1. Do you live in the home as your primary residence? | | | | 5. Is your loan amount less than $729,750? This refers |
| This means that you reside more than half of the time | | | | to the conforming limit for high cost areas and applies |
| in the subject property. Some borrowers may own | | | | to one unit properties. If you have a 2-4 unit property, |
| more than one home, but only home may be | | | | and live in one of the units, you may still qualify for a |
| designated as your "primary" residence. This loan | | | | high loan limit as multiple unit properties allow for larger |
| workout plan is only available on your primary home. | | | | loan amounts under the plan. |
| 2. Was your loan originated prior to January 1, 2009? | | | | Once you pass the initial Obama loan modification |
| This is pretty straightforward-if your loan was taken | | | | questionnaire, you will be eligible to apply for a loan |
| out after that date-you are not eligible. | | | | workout. The application process will involve |
| 3. Are you facing a financial hardship situation? This is | | | | completing some forms and providing your income and |
| defined as a change in your income or expenses that | | | | asset documentation. You will also be given a short |
| is out of your control. You might have been laid off, | | | | telephone interview to review the information you |
| going through a divorce or separation, military service, | | | | provide. |
| have high medical expenses, loss of a co-borrower, | | | | CAUTION; Do not contact your lender to apply or give |
| etc. The prospect of "imminent" financial hardship is | | | | them any of your financial information until you |
| also acceptable. This might refer to an increase in your | | | | completely understand the requirements for approval. |
| interest rate in the near future making your mortgage | | | | You must be able to complete your loan modification |
| unaffordable, or the knowledge that your income will | | | | application correctly if you hope to be approved. Make |
| be reduced. | | | | certain you have adjusted your budget and fine tuned |
| 4. Does your current payment equal more than 31% of | | | | your forms before your lender reviews them. You only |
| your gross income? This is a little more involved than it | | | | get on opportunity under Obama's loan modification |
| seems. Remember, your gross monthly income is your | | | | plan, make sure you do it right and avoid any costly |
| pay before any deductions, and this includes all | | | | mistakes. |