The record number of foreclosures that have impact the United States has sent shock waves through the nation. Sadly, the development of such a high, record number of foreclosures is the result of a rapidly deteriorating economy coupled with record unemployment. With limited funds, people are not able to make their monthly mortgage payments. Ultimately, this leads to foreclosure. Thankfully, for those that may find themselves in such a serious situation, President Obama’s home loan modification program may prove to be the solution to one’s mortgage ills.

The home loan modification program is a federally backed program that allows troubled borrowers to renegotiate the terms of the mortgage. This way, the potential to get back on the path to timely payments is made more likely. Such an outcome can be achieved by lowering monthly payment amounts, reducing interest rates, among other solutions. However, you simply cannot request a home loan modification and receive approval. Certain criteria need to be met and they include:

To determine your eligibility for the Obama home refinance program, you need to find out if your mortgage is owned or is backed by Fannie Mae and Freddie Mac. There are toll-free numbers you can call to find out. For Fannie Mae the number is 1-800-7FANNIE. For Freddie Mac, the number is 1-800-FREDDIE. You can also access them through the internet at www.fanniemae.com/loanlookup and www.freddiemac.com/mymortgage. You must also be up-to-date on your mortgage and the amount you owe cannot exceed 125 percent of the property’s current market value. You will also need to provide evidence that you can make future payments and the lender must determine that refinancing will help keep your loan stable and affordable.

There needs to be a reasonable expectation that you will eventually become current on your mortgage. There also needs to be an expectation that you will not fail behind again in the future. The home loan modification program is not intended to buy time for those that will never be able to avoid foreclosure. Rather, it is intended as a safe program for those that need a slight change to their current terms in order to get out of a proverbial hole.

A loan modification through Obama’s Home Affordable Plan takes an existing loan and reworks the terms to achieve a lower monthly mortgage payment. Through this program, the late fees and penalties are forgiven, and this allows the homeowner to get a fresh start. Usually any money owed on back taxes or anything else can be worked into the life of the loan.

Learn more about Obama Mortgage Relief Plan Qualifications.