Home Afordable Modification Program vs. Home Affordable Refinance Program: Ready or not these programs are going to be in effect full force in the coming months. President Obama is rquesting that all Americans that are struggling to make their payments are evaluated for one of these programs BEFORE being sent to foreclosure. Great IDEA, but are we factoring in the statistics that several of the modified payments are still to high for consumers and have the potential to fail 6 to 12 months down the road.
WHO IT CAN HELP: If you have a job and can readjust your budget to meet a modified payment ( A few hundred dollars off your mortgage) Then these programs will work for you during your hardship. The bottom line is that you have to have a steady flow of income to support regular payments ON TIME. You will be asked to make three "on time" payments in a row before your loan is permanently modified.
WHO IT WILL NOT HELP: IF YOU DO NOT HAVE A JOB or prospects of a JOB for the next several months, you will not have reliable income to qualify for these programs. Try asking for a "special forebearance" that allows you to skip a few months payments while you search for a job. Once you find a job then apply for the modification programs and you may find success.
One of the TOP reasons these applications fail is that the correct requested paperwork does not get to the lender. Files are only kept open for a certain amount of time before they are closed due to lack of correct docuements. FAX and MAIL in copies of your requested documents to ensure that they are received. DOUBLE CHECK that your file is in order several times.
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