Homeowners who previously had a trial modification on their home loan with Wells Fargo may have found themselves receiving a cancellation as the number of active trial modifications for Wells Fargo decreased from June to July. Many mortgage servicers have seen drops in the number of active trial modifications and, while some homeowners believe this is due to lenders being unwilling to work with homeowners who need mortgage assistance, many worry that there could be a bigger problem.
Wells Fargo did see an increase in permanent home loan modifications made from June to July and, overall, have seen increases for the year. Yet, according to the June Making Home Affordable servicer report, Wells Fargo had 30,949 active trial modifications at the time the report was released. However, the report for July indicated that only 22,338 active trial modifications were in place for Wells Fargo, which is a substantial decrease.
Trouble between home loan servicers and homeowners has been well documented and there are those who feel that homeowners are not being treated fairly or offered the mortgage assistance that may help them keep their home. While there are cases where homeowners have been treated poorly, cases where homeowners either do not qualify for a permanent modification or file improper paperwork are causes of trial cancellations as well.
Trial cancellations, however, may point to a bigger problem which is rooted in unemployment. Some homeowners who are granted a trial modification are still unable to make payments even with a reduced mortgage obligation. Many homeowners either become delinquent or re-default on their home loan simply because they do not have the income to meet their financial needs.
It’s hoped that the Making Home Affordable extension programs and in-house initiatives from lenders themselves will provide alternative forms of mortgage aid to homeowners in specific trouble. For instance, certain extension programs deal with unemployed homeowners specifically or those who may have an underwater mortgage. There are some cases where a home loan modification is unhelpful but with alternate assistance plans available more homeowners may find solutions to their home loan problems even if they are denied a permanent home loan modification.