The United States Loan modification has appeared due to the economic recession currently in progress. Because of the recession underway, almost six million homeowners about to face home foreclosures. Consumers have also stopped spending as much money.

In order to fight this problem, President Obama has organized a well-formulated and well-devised financial stimulus package for loan modification that if used properly can produce an outstanding incentive to the American economy through the home market system.

According to Obama’s Home Mortgage Plan, all individuals will be able to obtain a 30 years fixed rate mortgage with a low interest rate of 4.5%. Also, current homeowners would have access to refinancing at a 4.5% interest rate.

Unlike refinancing, loan modification isn’t like receiving a new loan. Instead, it is actually changing the terms of your current loan. The government offers incentives to homeowners who decide to go with the loan modification process. The following are the incentives:

1. The borrower’s expense will be lowered from 38% of gross income to 31% because the government will assist lenders with the cost of a loan modification.

2. The borrower gets a thousand dollars yearly for the time left on the loan up to 5 years.

3. The lender can receive up to $1,500 for a qualified loan modification.

4. The complete government allotment per home could be up to $10,500 for this program.
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Some overall benefits to the economy through The Obama Loan Modification Plan are listed here:

1. People will save money through the reduced interest rate they will receive upon qualifying for a loan modification plan.

2. There are cash incentives to encourage borrowers to use the modification program.

3. There is also a $1,000 incentive simply for originating the loan modification, and an additional $1,000 for three years. These incentives, obviously, are only valid if you pay your dues on time and do not let them go into default.

4. Finally, if the desired percentage of monthly income cannot be met, the program tries to lessen interest charges and lengthen the term of the loan instead.

As with just about any loan, you need to fit certain criteria to qualify for a loan modification plan. Two things are very important to qualify: You must be the prime resident of the home and your loan should not date further back than January 1, 2009.

Anthony Flores is a recognized authority in loan modification processing and loan modification processing questions.Visit our site to see if you qualify for loan modification today!