$75 Billion is a lot of money at any time, particularly in these austere times. Scheduled for termination sometime toward the end 2012, it is easy then, to understand why everyone wants to get "theirs" before it is all gone.
Part of a larger package of incentives and credits, the $75 Billion is to assist homeowners who are in danger of loosing their homes to foreclosure. Lender banks are encouraged to work with homeowners who apply for loan modification and restructuring. Those banks that participate in the program will be the recipient of financial incentives built into the program. These are to encourage their full participation.
Overwhelmed by the amount of applications, faced with their own internal guidelines, and needing to abide by the guidelines of the program some banks are having a hard time resolving and approving the loan modification applications they receive in a effective and timely manner.
A lot of this has to do with what the program calls for, and what the applicant homeowner has to offer in order to qualify for successful restructuring and modification of their mortgages.
One immediate issue is the 31% threshold of gross household income that the federal program insists on as a qualifying criterion. Faced with diminishing and sometimes irregular income, the increased use of credit cards and other credit instruments, meeting that threshold will be a particular hardship for many.
Tomorrow we will discuss further, other criteria that must me met by the homeowner and the participating bank to confirm and comply with the dictates of the programs' guidelines - hopefully an indept discussion over the next couple of posts will assist all in developing a better understanding of what they need to bring to the table if they are to be successful
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