Overview of Home Affordability Modification Guidelines

Raleigh Homeowners take note of the loan modification guidelines. North Carolinians have not been impacted as much as other areas of the United States. With the current unemployment rate exceeding 11% in the state some owners are in distress. The Raleigh home market is recovering and we seem to have bottomed. Loan modification guidelines as below.

•Loans must have originated on or before January 1, 2000.
•Mortgages must be for a single-family residence with a loan balance no greater than $729,750.
•Loans can only be modified once beginning March 4, 2009 through December 31, 2012.
•Home cannot be vacant or condemned and must be a primary residence—not investor owned.
•Interest rate can be lowered to as low as 2 per cent and the term of the mortgage can be extended to a maximum of 40 years in order to maximize the reduction in loan payment.
•Borrowers will need to provide an “affidavit of financial hardship”, their most recent tax return, and two recent pay stubs.
•Service providers will be required to follow a sequence of steps that modify the loan in order to reduce the monthly loan payment to no more than 31% of gross monthly income.
•Homeowners who make their payments on time are eligible for up to $1,000 of principal reduction payments each year for up to five years

Lenders are still foreclosing on homes at a worrisome rate outpacing the Fed’s effort to stall the problem.
Since the HAMP program has started (Home Affordabilty Modification Program) processors have have worked with approximately 750,000 modifications, less than a mere 4% of these mod’s have become permanent.
Critic’s are calling the “mortgage program” a failure. Although not every foreclosure in the country can be prevented House Republicans and Democrats are urging the Treasury Department to do a better job of making the trial modifications permanent.
With next wave of mortgage resets to begin mid 2010 thru 2011 many believe that housing prices have further to fall. With the First Time Homebuyer Tax Credit to wind up in April uncertainty remains. Although, not all is bleak unemployment seems to be leveling off and with employment being a lagging indicator of an economic recovery any stability may signal the worst is over.
The Triangle area market has seen the median price of home prices drop over 2009, all eyes are looking to a spring market in 2010 with renewed optimism.