What is the obama loan modification program

If the modified loan is expected to produce more cash flow for the mortgage holder, the servicer is to restructure the loan. Howard Glaser, a mortgage industry consultant and a U. Second liens: The Obama plan also addresses the issue of second liens—such as home equity loans or home equity lines of credit—by offering incentives to extinguish them.

But key details on this component of the plan remained unclear. Will it work? Moody argues that while the plan may reduce foreclosures for primary residences, it could lead to a spike in defaults for another group of homeowners. Glaser, meanwhile, worries that lenders may soon be overwhelmed by inquiries from homeowners looking to participate. Retrieved on July 17, from USNews.

Update March 22, We are fully operational at this time as we are able to continue working remotely and filing electronically. Contact us today to schedule a meeting or consultation via video chat. For example, if the lender is willing to reduce the payments, but your home is worth substantially less than the value of the mortgage and you don't plan on living their long enough to reduce your negative equity, you might be better off with a short sale.

Loan modification programs are typically designed for homeowners who are having difficulty making their mortgage payment, but who don't qualify to refinance their mortgage. A loan modification is different than a refinanced mortgage which trades in one mortgage for another one. It also differs dramatically from foreclosure , a short sale , or a deed in lieu.

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