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Current economic recession has hit many people and many have lost their jobs. Some people are still not able to find the jobs while few have been forced to have a huge cut in their salary. For all these folks president Obama's loan modification plan intends to help nearly four million homeowners and save them from foreclosure. Loansstore, a leading name in America as a loan modification service provider helps you with your loan modification. You can lower your monthly mortgage payments by availing service of a loan modification from this firm.

Mortgage providers and other banks have been disinclined to approve their mortgages and plans. Thus the new Obama's making home affordable program provides incentives to the lenders. For each eligible loan modification lender will receive $1000, this will be for the first three years, as long as the borrower is current on the payment.

The official name of the federal loan modification program is the "The Homeowner Affordability and Stability Plan" and $75 billion was funded for this plan, it has two components:

The first part is for homeowners who are unable to refinance because of the depreciation in their home value because of the recent downfall in the housing market. This is based on the concept that a homeowner will prefer to keep his home, even if the home value has depreciated below the mortgaged amount. Foreclosures take place not because a loan turns upside down but it takes place because the family can't afford the monthly payments. To qualify for the loan modifications the amount should be greater than 80% of the home market value.

The second part involves helping homeowners who are on the verge of foreclosure. It allows a modification in the mortgage so the payments are affordable. This implies lowering the rate of interest and declaring that the monthly payment isn't more than 31% of the mortgagor's income.

Those homeowners who have taken the advantage of the loan modification plan and are current on their payments can get $1000 subtracted from their main balance for five years.

There are few guidelines for the eligibility process and some are mentioned below:

• The property should be a single-family residence
• The home should be the primary residence of the borrower
• The current mortgage balance should not exceed $729,750 and should not have been originated before 1/2/2009.
• The borrower should be able to prove his financial hardship status.

Obama Loan modification plan can save homes of thousands of people who are affected in recession. This plan will work for few more years and it expires on December 31, 2012 and all including the Bank of America loan modification program are also agreed to this.