Citigroup is one of the mortgage servicers who has been using home loan modifications from the Obama’s Making Home Affordable Program to help homeowners find a more affordable home loan payment. Many homeowners have seen cutbacks at their jobs or have had a spouse who has become unemployed and, as a result, have needed assistance with their home loan.
While many homeowners have simply asked for a payment reduction, there have been a variety of methods used to provide affordable housing for troubled homeowners. Yet, the home loan modification program has been, for many, the first stop on the road to getting a more affordable mortgage. However, many are concerned that the decrease in trial modifications that have been made could signal a bigger problem for the housing market.
Citigroup has been one of the top lenders and the modification program and has seen continued increases in the number of permanent modifications made. There has been a decrease in some modifications for Citigroup, which many believe to be a hindrance on the program’s effectiveness. In June 2010’s Making Home Affordable report Citigroup had 27,965 active trial modifications but only 20,458 active trial modifications as of July report.
It’s true that Citigroup did see an increase and the number of permanent home loan modifications but many worry that homeowners are either not being given an opportunity to obtain a permanent modification or simply cannot afford their home even with a mortgage assistance plan in place. Some homeowners have accused lenders of not granting them a permanent modification while lenders have stated homeowners either do not qualify or file improper paperwork, which causes trial cancellations.
Yet, there is rising concern that traditional modifications are simply not enough to help certain homeowners and many who have gotten a modification are either becoming delinquent in their home loan payments or are re-defaulting. There have been specific extension programs created which may be of assistance to these homeowners who cannot benefit from a traditional modification. These extension programs target homeowners who are unemployed or have an underwater mortgage, among other things, so there may be more paths that a homeowner can take if a traditional modification provides little help in making their home more affordable.