Because of the continuing economic crisis, many homeowners are at risk of default or have become delinquent in their mortgage

payments and maybe have become candidates for foreclosure. In response to this problem, the Obama Administration created a federal program called the Home Affordable Modification Program. The Home Affordable Modification Programs Overview The Home Affordable Modification Program is one of the governments Making Home Affordable programs. It helps homeowners who are facing financial hardship avoid foreclosure by changing the terms of the loan into something more affordable and sustainable in the long run. The Home Affordable Modification Program is able to do this by lowering the monthly payment to 31% of the homeowners monthly gross income (before taxes). The mortgage lender will accomplish this through several ways. Under the Home Affordable Modification Program, they can reduce the interest rate to as low as 2%. They can also extend the loan up to 40 years. And lastly, they can defer payment for a certain portion of the principal until the debt is paid off. Any interest on the deferred amount is waived. How to Qualify for the Home Affordable Modification Program There are several criteria that need to be met before one can avail of the Home Affordable Modification Program. First, the borrower needs to be delinquent in his payments, at risk of default or facing imminent foreclosure. The property in question should also be the borrowers current residence before he applies for the Home Affordable Modification Programs benefits. In addition, the mortgage should have been availed on or before January 1, 2009. Lastly, the Home Affordable Modification Program has a maximum limit on the amount of the principal balance. For a one-unit house, the main balance should not exceed $729,750. For two units, it should be no greater than $934,200 and $1,129,250 for three units. For 4 units, the Home Affordable Modification Program requires that your mortgage should be equal to or less than $1,403,400. The Home Affordable Modification Programs Incentives Incentives for servicers and borrowers encourage people to join the Home Affordable Modification Program. For servicers, incentives ranging from $400-$1600 will be paid for successfully completing modifications on the mortgage terms and payment according to the Home Affordable Modification Programs guidelines and steps. For borrowers, they will be given a principal reduction of up to $1000 every year for 5 years for staying current on their payments.