President Barack Obama's 2009 Stimulus Loan Modification Plan is based on 'affordability' to save the homes from foreclosure & bankruptcies. As explained by the President, 'the earlier loan modification plans failed in the US as they did not reduce the monthly mortgage payments in real terms. In the 2009 Stimulus Package for loan modifications we have taken care of such things pretty well.

Let us see how will President Obama's Stimulus Loan Modification help the home owners?

- Ceiling on the Monthly Mortgage Payments

Now your monthly payments cannot be more than 31% of the borrower's gross income. the total of all the credit payments taken together such as car, credit card, home mortgage, etc. cannot exceed 55% of the pre tax income of the borrower.

- Insured Loans

The ones whose loans are owned or insured by Freddie Mac & Fannie Mae are now perfectly eligible for applying for a new loan deed. Even if your loan does not fit into this condition, in case your case meets the next requirement, you can apply for a refinance with Fannie Mae or Freddie Mac.

- Value of the Mortgage

In case your mortgage value is higher than 105% of the actual market value of the property in consideration you can immediately apply for the loan modification or refinance.

- HUD Counselors

Earlier the home owners had to pay heavy fees to the private counselors who helped them deal with the banks or the mortgage companies. Yet, the hardly got any success. Now, you can seek for the best professional guidance for absolutely no cost. The Housing & Urban Development Department of the US Federal Government (HUD) has appointed several counselors who would guide on how to manage your finances properly, present your case before the lender. Under the Stimulus Loan Modification Program, the Federal Government would pay these counselors on your behalf.