| When the Obama administration launched its Home | | | | modification. The most important might be debt ratio. |
| Affordable Modification Program in 2009, the | | | | According to the Home Affordable Modification |
| government's goal was a simple, but important. | | | | Program regulations, the total mortgage loan payment |
| One: It wanted to slow the number of housing | | | | -- including interest, property taxes and other fees -- of |
| foreclosures sweeping the country. This is still an | | | | homeowners must be more than 31 percent of these |
| important goal: According to foreclosure information | | | | owners' gross monthly incomes. |
| Web site RealtyTrac.com, U.S. property owners | | | | The theory is that homeowners who aren't spending |
| received 2.8 million foreclosure filings in 2009. That's an | | | | this much on their mortgage loans don't require a |
| all-time record. | | | | modification. |
| Aurora Lillo Editor of the "Best Loan Modification | | | | There are other requirements that homeowners must |
| Companies" website -- -- pointed out; | | | | meet, too. They must be seeking a modification of a |
| "…If you hold a mortgage loan serviced by Wells | | | | loan attached to a primary residence. Second or |
| Fargo Home Loans, you might qualify for a loan | | | | vacation homes are not eligible for modifications under |
| modification through the federal program. The | | | | the federal program. Homeowners must have a |
| government is offering financial incentives to | | | | mortgage loan of $729,750 or less, and they must be |
| companies such as Wells Fargo to encourage them to | | | | struggling to pay their monthly mortgage loan. Finally, |
| modify the loans of homeowners who are struggling | | | | they must have taken out their mortgage loan on or |
| to pay their mortgage bills each month. Lenders can do | | | | before Jan. 1, 2009, to take part in the federal loan |
| this in several ways: They can reduce the principal | | | | modification program. |
| balance of homeowners' loans, lower the interest rates | | | | "…The federal program has a goal of preventing 3 |
| attached to them or restructure the loans' terms. Each | | | | million to 4 million housing foreclosures. So far, it's not |
| of these steps will lower the mortgage payment of | | | | reached this goal. However, homeowners who are |
| homeowners and, hopefully, allow them to avoid | | | | struggling to make their loan payments, and who have |
| defaulting on their home loans. This will, in turn, keep | | | | the necessary debt ratios to qualify for it, should call |
| them from losing their residences to foreclosure…" | | | | their mortgage lender immediately. It might mean the |
| There are certain qualifications, though, that | | | | difference between losing their homes to foreclosure |
| homeowners must meet to qualify for a loan | | | | and keeping them…" added A. Lillo. |