Mortgage Modification Eligibility Requirements
March 4th, 2009
I tried accessing the U.S. Dept of Housing and Urban Development to directly reference the eligibility requirements but it is not responding reliably. Because of this I’ll initially refer to the Reuters’ article wherein they report the requirements for eligibility.
Requirements for President Obama’s mortgage modification plan include:
- Must demonstrate a lack of ability to pay current mortgage. Borrower’s retirement accounts will NOT be factored into ability to pay metrics.
- Must demonstrate a drop in income or increase in payment. Every borrower seeking modification will be screened.
- Borrowers seeking a modification do NOT need to be delinquent in order to qualify.
- Borrowers with high total debt may be required to enter government-certified debt counseling.
- The mortgage must have originated prior to Jan 1, 2009. The home must be occupied by the owner and must be a primary residence. The home must be a 1-4 unit family dwelling.
- Loans have upper limits; single-family homes must carry no more debt than $729,750.
- Borrowers seeking to have their mortgages modified will incur no cost to have their mortgage modified. Applications for modification will be accepted until Dec 31, 2012.
- There is no minimum or maximum loan-to-value ratio.
- Bankruptcy is NOT an automatic elimination; qualification for modification does NOT waive the legal rights of borrowers who are in litigation.
- Foreclosure actions are temporarily suspended while borrowers are evaluated for inclusion in the program.
- Eligibility for the program ends at the end of three years.
I like some of the stipulations in here such as possible debt-counseling although I would like to see exactly what the trigger for that is and how it is carried out.
The overview adds insight into the plan.