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The Obama administration is aware that homeowners are in financial problems because the economy is not that well and so put the home mortgage refinancing loan in action. Some homemakers are even faced with home foreclosures and the numbers are expected to rise further.Many individuals are suffering from unemployment due to poor performance of companies and values of homes are falling down every day. In such situations, President Obama’s home refinance plan is likely to help millions of borrowers to save their homes from foreclosures. Here is some information on how it actually works.

In March 2010, Obama’s “Making Home Affordable Program” which is supported by $75 billion stimulus money became effective. With this federal plan distressed homeowners can consider mortgage refinancing or modification of their existing home mortgage loans to make monthly mortgage payments more manageable. This way the government program can assist millions of American homeowners to put their finances back on track and save their precious homes from possible foreclosures at the same time. However, the monthly income earned and total debts owed have to be verified with the help of income tax returns or monthly salary slips.

Under rules and regulations of the Obama mortgage refinance program, which provides home mortgage loan modification or refinancing plans banks as well as other mortgage servicers will get $1,000 in cash as incentive for approving each homeowner whose current home loan is either modified or refinanced as per the terms and conditions of the federal plan. And for modifying or refinancing home mortgages, 20% equity in homes is not required any longer. You can now modify your home loans up to 105% of the value of the home. This is going to help hundreds of struggling homeowners whose home values have dropped due to the housing crisis.

Borrowers who have taken advantage of low modification or home affordable refinance rates and modified or refinanced their existing home mortgages are now paying monthly installments which are less than 31% of their gross monthly income.

This helps them to save lot of money every month on their mortgage payments. Other than that, they are not required to pay any closing costs or such other additional charges after they have been for the home mortgage modification or California mortgage refinancing programs which are provided by the government. But only those homeowners can be eligible for a home mortgage bailout who are primary occupants of the homes which are to refinanced or whose mortgages are to be modified.

To know more about the home affordable refinance program, visit companies like USLoanz.