Among the details, borrowers who want to qualify for the loan modification plan will have to provide proof of financial need and payment ability, including an affidavit of financial hardship, their most recent tax return and two pay stubs.
The program will apply to loans made on or before Jan. 1, 2009 and modifications will be allowed only once. Those with first mortgages of more than $729,750 do not qualify.
The rules announced Wednesday say homeowners may be able to refinance even if they have less than 20% equity in their homes. An appraisal may be necessary.
All borrowers must document income, which includes providing two most recent pay stubs and an affidavit of financial hardship....
Servicers also must follow an established process to reduce the monthly payment to no more than 31% of the borrowers' gross monthly income. To do that, lenders will first reduce the interest rate on the loan and then could extend the term of the loan to as many as 40 years.
Servicers will get financial incentives, such as an up-front fee of $1,000 per modification, to encourage participation.
Well its a start - it helps people in trouble and people not yet in trouble. With the flux in the job sectors someones qualifications may continually change depending on when they apply.
We will look at a longer, more substantive article later.