The government’s Home Affordable Modification Program is a funded bill that aims to ease mortgage burdens on middle-class homeowners to help them avoid foreclosure. The program aims to “help 3 to 4 million homeowners avoid foreclosure.”

Help for At-Risk Homeowners
The plan works by providing job counseling for unemployed homeowners, recommending to lenders to lower principal payments, providing incentives for lenders to allow loan modifications, and, if all of the above fail, helping homeowners find a home that is more affordable.

The NPV Value
All servicers must run a required “net present value” and an alternative NPV so that they can estimate the profitability of any loan while also making principal write-downs.

Lenders can elect to utilize the alternative NPV if it’s higher than the standard net present value. Therefore, lenders have to consider whether a principal write down and government subsidies will be profitable for them. They can then choose to take the government’s offer, or leave it.

Principal Write Downs
Since soaring principal rates are a huge cause for the housing crisis, it’s difficult for homeowners to get out of difficult mortgages. A write down of principal is one of the easiest and fastest ways for a borrower to obtain affordable mortgage rates.

If you wish to obtain a loan modification, you need to put your requests in writing and submit them to your lender. You should document all your income and expenses, and try to save for a few months so you can offer a good package to your lender. If you play your cards right, then you can get a loan modification easily, and without much trouble.