The recession has had a severely detrimental effect on the property market, with house prices crashing dramatically. Because of job loss and an ever growing unemployment rate, millions of people are finding themselves in financial hardship and unable to meet their monthly mortgage payments. These are circumstances that individuals have, unfortunately, very little control over. And for that reason, Obama's Loan Modification Plan was introduced to help.

Obama's Loan Modification plan has the major selling point of being as attractive for lenders as it is to borrowers. By offering cash incentives to lenders allowing their customers to modify their existing loans, more and more lending institutions were prepared to partake. In order to qualify for said incentives, lenders must complete a successful loan modification and the homeowner will also qualify for an incentive by making the payments on time each month. Because such modifications lead to a depletion in the overall profits of the lenders, the incentives are offered to ensure they do not lose out.

As soon as someone applies for loan modification under Obama's mortgage modification plan, they will be eligible to extend the period of time over which they will repay their loan to up to 40 years. In addition, the lender might offer to reduce interest rates, cut the principal and organise for the monthly payment to be shrunk to a size that is manageable and affordable for the borrower. The mortgage rate offered is fixed (as opposed to the adjustable and unpredictable rate often offered with traditional refinancing). This leads to the homeowner being able to make a monthly payment, avoid arrears and ultimately to avoid foreclosure. Eliminating foreclosure is beneficial to both borrower and lender alike.

Obama's mortgage modification plan is a lifeline to the millions of homeowners left in dire straits as a result of the global recession and subsequent job losses. Instead of losing profits to a crashing housing market, lenders have found that with incentives from this program, it is much more favourable for them to negotiate loans with borrowers. As such, this program looks like it might be a real potential solution to the problem of increasing foreclosures.

To learn more about getting assistance from Obama's Mortgage Modification Plan for your home payment, visit http://www.mortgage-modification-loan.org/loan-modification-top-10-questions where you'll find this and much more, including how to apply for a home loan modification with success.

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