Government Home Loan Modification: New Rule Every Homeowner Facing Foreclosure Needs to Know About

New Rule Affects Homeowners in Obama Administration’s “Prevent Foreclosure” Program

Now, if you want a home loan modification, you’re going to have to provide documentation to prove your financial status. This is a change in the Obama administration’s foreclosure prevention program, Making Homes Affordable. According to a press release on MakingHomesAffordable.gov, the reason for the change is explained in the following manner:

“With more than 850,000 homeowners in trial and permanent modifications, we are providing immediate relief to struggling homeowners,” said Phyllis Caldwell, Chief of Treasury’s Homeownership Preservation Office. “Today’s guidance represents our commitment to more efficiently move qualified homeowners into permanent modifications.” . . . This guidance refines the documentation requirements in order to expedite conversions of current trial modifications to permanent ones. (emphasis added)

Bottleneck in Pushing through More Home Loan Modifications

There has been a bottleneck in the process, preventing more homeowners from receiving home loan modifications. And, the fingerpointing goes both ways.

Homeowners say that banks and other lenders required unreasonable documentation, and lost documents even when they were sent in. Some homeowners report having to send in documents on three or four occasions, still with no results.

Lenders have complained that homeowners who want a home loan modification failed to provide proper documentation. Not only that, they’ve failed to do so within the proper timeframe.

Government Grants Home Loan Modifications . . . If the Fingerpointing Can Be Stopped

According to the article, this should alleviate the fingerpointing. The article states:

The new procedure, to be adopted by loan servicers by June 1, would provide troubled borrowers with what the Treasury Department said would be a “simple, standard package of documents” to complete so that servicers could calculate whether they would qualify for a loan modification.

Only time will tell how it all shakes out. Read the entire article on how this change in the Obama administration’s prevent foreclosure program may affect you.

P.S.: Read how one foreclosure cleaning business owner makes up to $40,000/wk.

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Copyright © 2010 Yuwanda Black for Foreclosure Business News. Article may not be reprinted or reproduced in any manner without the express, written consent of the author