How To Qualify For Obama’s Principal Reduction Program

One of the excellent ways to get rid of excessively unmanageable monthly mortgage payments could be to take advantage of federal principal reduction programs. Obama administration’s Making Home Affordable MHA program is a critical initiative to help underwater homeowners avoid foreclosure and stabilize upheaval in the real estate market. As part of MHA, many other programs including, FHA principal reduction program, Home Affordable Modification Program HAMP, 2nd Lien Modification Program, etc. were introduced by President Obama to help distressed homeowners by reducing their monthly mortgage payments and interest rates to make them more affordable. It could be tricky for you to choose the right program that suits your situation the most. Moreover the entire process of applying for a principal reduction program can sometimes be overwhelming. It would be in your best interest to engage a mortgage expert to assist you along the way. Let an expert understand the right option for you, prepare your modification application, and save your time and energy.

Before you apply for any principal reduction program, it is better to identify whether or not you could be eligible for it. To begin with, you can qualify for mortgage modification under the HAMP only if your mortgage was originated on or before 1 January, 2009. HAMP eligibility standards require homeowner to use his home as his primary residence. Borrower is also required to demonstrate his financial hardship which might have been resulted out of income loss, increasing financial obligations, etc. To qualify for the HAMP, homeowner’s debt-to-income ratio must be above 31% of his gross monthly income. If you do not meet HAMP criteria and still want to qualify for it, you can take home loan modification help from a mortgage specialist because you still have enough time to be eligible as HAMP is scheduled to end on 31 December 2013.

There is one more option to explore, Principal Reduction Alternative PRA service from usloanz.com. It is designed especially for homeowners who owe more on their mortgage than the actual worth of their homes. This program aims at encouraging mortgage lenders to reduce the principal amount stressed and underwater homeowner owes on his home.

You could considerably reduce existing burden of second mortgage payments with 2nd Lien Modification Program 2MP only if your first mortgage was modified permanently under the HAMP and you own a second mortgage on the same property. To qualify for the 2MP, an applicant must not have missed 3 consecutive monthly payments on his HAMP modification. Home equity loan, Home Equity Line Of Credit HELOC and some other kind of second lien could be modified under the 2MP.

Obama administration thus has attempted to provide effective solutions to troubled loans and give relief to homeowners in their unfavorable monthly mortgage payments. Modification process is carried out in order to reduce monthly payments, interest rates and also principal unpaid balance. Thus, there are many modification options you can choose from. All you need to do is to find out a reputable mortgage professional advisor who will explain you how to get a principal reduction and help you to select the best solution for your mortgage troubles.Visit usloanz.com site for more information .