Legislation - Modification to the Home Affordable Modification Plan

Problem:
Present modification plan created by government (President Barack Obama) has flaws in the system that need to be modified to assist the homeowner in the return or sale of his property.

The Solution:
Modify the Home Affordable Modification Plan, because the same issue will present itself in the next five years, the economy will not be strengthen, community needs to be granted more stable assistance, remove stress from banking institution so that they may return to banking and less modifying loans, and less worrying for the clients because they will actively participate in their modification process.

The Plan:

1.    Change five year plan to three year plan, why?   Rate is not fixed, it is an adjustable rate, five years is too long to take comfort in a rate that will adjust; too much room for incident.

2.    People in the modification plan need to go through extensive financial planning and training that prepares them to refinance through a third party lender or the lender they are currently under. This training needs to be a course consisting of at least twelve months of training and education which should include a certificate of completion.

3.    Clients who request the Loan Modification should automatically have a 3 month memorial/stay while the Certified Loan Modification Professional works with their Investor, Lender and Organization on an approval. The proposed mortgage payment will be set aside in a separate bank account while they wait for approval.

4.    The government restrain from promoting non-profit agencies. There should be equal opportunity in servicing the loan modification for for-profit and non-profit, however both parties need to become licensed in the area of completing loan modifications and then be promoted as Licensed Loan Modification Specialists. What part does the bank play? The bank should not do anything but sign off on the loan modification and begin to take new payments from borrower. The modification specialist will work directly with the borrower, investor, and lender to obtain one clear goal.


How does this work

1.    Home owner is facing foreclosure due to non-payment of mortgage loan.
2.    Home owner contacts a licensed loan modification specialist.
3.    Loan modification specialist meets with homeowner to qualify the homeowner for a modification. Homeowner, specialist, investor, and bank work together.
4.    Homeowner must attend and participate in a program, to prepare them to refinance within 12 month. The classes in the program should be a twelve month course that will transition the homeowner from an unqualified buyer to a qualified buyer with savings, credit score 680 or above and financial savvy.

5.    When the homeowner completes the course and has makes payments as agreed by contract with investor and lender/bank; homeowner will be returned his property by refinancing the loan through a third party lender or the original lender.
 
The Need

Most people that are in foreclosure are not financially savvy. Over four million households in the US this past year have been recorded as being in foreclosure in county clerk offices, resulting in a 115% increase since August 2006. Foreclosure not only hurts the homeowner, but the family, the community and ultimately the nation.  



How Legislation can help

Implementation of the program will give relief and hope by resulting in the following:
•    Preventing tax hikes for middle and upper class families
•    Preventing recession in real estate industry
•    Provide community outreach to American families
•    Providing educational resource to property owners and homebuyers
•    Changing business perceptions as it relates to helping those in foreclosure
•    Giving real estate transactions back their integrity

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