The Obama Administration has into place what is suppose to be a refinance plan is more than the value and those that are having a difficult time making their payments due to some life hardship, such as loosing their job. Let me give to you what I know about these two different plans. You should know Documentation before you approach your lender about a Loan Change.

Home Affordable Refinance Requirements:

• 1 to 4 unit dwelling
• Loan must be owned or guaranteed by Fannie Mae or Freddie Mac
• Must be current with your present mortgage payment **no late payments within the past 12 months
• Mortgage balance must be about the same as the value of the property or less *you may be eligible if your first mortgage does not exceed 125% of the current market value of your home

Home Affordable Modification Requirements:

• Must be your primary residence
• The balance of your mortgage cannot be greater than $729,750
• You must be able to prove that you are having difficulty paying your payments to include; a reduction of income, loss of job, increased expenses, increase in mortgage payment. A hardship of some kind with documentation to prove it.
• Your must have closed on your mortgage loan prior to January 1, 2009
• Your payment including principal, interest, taxes, insurance, homeowner’s association fee, if applicable; must be greater than 31 % of your current gross income

That spells out the qualifications and will help you know if you can first meet the standard requirements for the programs. The mentioned criterion is not conclusive regarding documentation; as you must submit all normal documentation for your financial status. What I do know is that the modification has been a very slow process. I know in fact that it has taken over a year for some to just get to the trail period of the modification. It seems that the lenders bend over backwards to make sure the governments qualificationsare followed to the tee and they are not giving the applicants the benefit of the doubt on anything. It is taking months and months to get these modifications ready for signing. I have read that some of these people who were very delinquent wound up going into foreclosure anyway. I am not being negative as this has been all over the web, here and there. The modification allows you a three month trail period in which you make the trial payment, if you make the payment satisfactorily and your income, assets and financial situation has not changed (it is verified again); they will eventually get the final modification ready for your to sign, at a lower rate and payment amount. It also has will allow some principal reduction for the first five years of the modification if you pay your payment as agreed.

This is not a bad thing at all, the only issue is time and it has stressed a lot of borrower’s with the time frame they are taking to get to the approvalstage of the trail period. It has taken months and even President Obama stated in the news the lender’s were not making enough of these modifications to help those distressed borrowers. I cannot relate to this time frame of getting the paper work done because when I was in mortgage underwriting, we did whatever we had to do to get loans approved at the end of the month and it was usually the month they were submitted to underwriting. So forgive me if I am not supportive with the time frame these lenders are giving. The consumers deserve better.

I honestly have not been made aware of how long the refinance option is taking and I would hope that it would not take as long as the modification does, for the sake of the mortgage borrower. If you need help, take the time to answer the questions given above, get your documentation together and call your mortgage servicer. If you meet the qualifications, they have an obligation to help you.