In my previous post I shared my excitment over a new refinance program. Over the last eight days I have identified many of my clients as potential benefactors of this program. Others, however, are not eligible for one reason or another.
As an alternative to this new refinance program, The Obama Administration has also released a universal loan MODIFICATION program. A modification is different from a refinance in that you work with your current lender to modify the terms of your existing loan rather than obtaining new terms on a new loan. Modifications are generally treated on a case-by-case basis, and up to this point modifications have not been wildly successful for homeowners nor banks.
Obama’s new program, however, provides guidelines for banks to follow when working through modification agreements, and financial incentives to both home owner and lender for maintaining successful modification terms. These elements will hopefully increase the effectiveness of modifications and ultimately keep more people in their homes and keep fewer homes up for sale.
An article was just published by CNNMoney.com and announces that some of the biggest lenders and mortgage servicers in the country have begun to participate in the loan modification program.
If you have either independently determined or had my help in determining your ineligibility for the new refinance program, go to this link to help determine if you are eligible for a loan modifiaction. This site is a great resource for information on how the modification program works.
I hope this information is helpful. Let me know if you have any questions.