Bank of America is one of the mortgage servicers who has been reported to have offered alternative home loan modification plans to homeowners who face foreclosure. Traditional modifications from the Making Home Affordable Program have been offered over the past months as a way to make home loan payments more affordable but many homeowners have been denied this type of mortgage assistance for a variety of reasons.
However, there are accounts that state mortgage servicers like Bank of America have been using various methods as a way to offer alternative modification plans for homeowners who are in trouble and may not qualify for a modification from HAMP. More servicers are said to be offering plans that reduce monthly mortgage payments, interest rates, or may extend the lifetime of a homeowner’s home loan, which could also bring a more affordable payment.
There is not a great deal of information on these alternative modification plans from private lenders as, obviously, they are conducted in-house and use no specific set of criteria across the board as to how homeowners may qualify. Yet, as redefault rates on modifications are still a problem, it’s believed that in situations where a homeowner has not benefited from the Making Home Affordable Program these alternative modification plans could help homeowners avoid foreclosure.
As to why these in-house programs may be different from traditional home loan modifications, when a mortgage servicer is able to work directly with a homeowner and use various means and criteria for qualifications, there can be more flexibility and modifications may be tailored for a homeowner specific needs. While mortgage servicers and these alternative modification plans are not perfect, there is hope that with the modification program from the Obama Administration still in place and these alternative modifications still available, more homeowners can find the mortgage aid they need to keep their home during these difficult financial times.