President Obama’s New Plan Makes it Difficult for Do-It Yourself Home Loan Modifications

A lot of homeowner’s would prefer modifying their mortgages on their own if it meant saving money to have someone else do it for them. While most real experts will tell you it makes more sense to hire a qualified loan modification professional, the option of applying for a home loan modification by the homeowner themselves has always been an option to all homeowners.

However, President Obama’s latest mortgage stimulus plan might have made it even more difficult for any homeowner applying for a loan modification on their own. After the initial enthusiasm, real estate analysts have started to get extremely disappointed with the plan announced on March 4th. Analysts say given the number of guidelines mentioned in the mortgage plan, it will become virtually impossible for homeowners to know whether they qualify for a loan modification or not. Even if they feel they do qualify, it is again equally tough to figure out which bracket or group they fall under.

Any homeowner applying on their own under the latest guidelines is more likely to have their loan modification applications rejected or given modification terms that do not truly benefit the homeowner. Another issue could be that banks would take their own sweet time to approve or reject an application and homeowners would have to make endless phone calls to their mortgage lenders with no progress being made. Expecting the banks to follow up with the homeowners could prove to be futile and homeowners might end up losing even more time and money which they expected to save by going on their own.

Industry watchers say it is more important than ever to take the services of a qualified loan modification consultant as they would not only make sure that the application goes through as per the given guidelines but also the consultants would do all the follow up with the banks and the homeowners can concentrate on their respective jobs and careers. A loan modification consultant would also be in a better position to negotiate with the bank for a better mortgage payment plan or interest rate. They would also push the bank for a decision and make sure homeowners are not left out for months wondering what the outcome of the application will be.

President Obama’s mortgage plan does not give any kind of incentive to the banks to approve mortgage loan modifications quickly. On the contrary, banks have until December 31st 2009 to implement the new plan. It is more than likely mortgage lenders would wait a little more to try and squeeze everything they can out of the mortgage borrowers. Analysts were hoping the plan would have either an incentive or some kind of penalty for banks to make sure loan modification applications were approved quickly but that is not the case.

Many homeowners who were so eagerly awaiting President Obama’s stimulus plan, say they feel even more confused than before and do not think applying for a loan modification on their own is a good idea. What they need is a loan modification service which does not charge any upfront fees and charge the homeowner only when it is clear the loan modification application has been approved by the mortgage lender. This would ensure that homeowners who were hesitant going to a loan modification expert due to the huge upfront fees with no guarantee will now feel more confident in applying with a consultant to increase their chances of getting their applications approved.