Alternative Home Loan Modification Plans–Are In-House Modifications Bringing Lower Mortgage Payments?

The Making Home Affordable Modification Program has been helping homeowners find more affordable mortgage solutions over the past months, but there are indications that the program has begun to slow down as fewer permanent modifications have been made over the past months. While permanent modifications are still increasing, the increase in numbers from month to month has not been as great as earlier this year.

Yet, homeowners are still receiving assistance through this modification plan, however there are those who are saying in-house modifications made directly from mortgage servicers are outpacing home loan modifications from the Making Home Affordable Program. According to a report from Hope Now, the number of home loan modifications that were completed for July 2010 directly from mortgage servicers has drastically overtaken those modifications from the Making Home Affordable Program.

The report on data gathered through July 2010 shows that, in July, 120,351 modifications were completed through these in-house, proprietary modification programs. While, in that same month, only 36,695 permanent modifications were completed from the Making Home Affordable Program.

This report also shows that the total number of proprietary modifications is around 3,097,838, while the total number of permanent modifications from the Making Home Affordable Program is only at 434,716.

There are individuals who say these in-house alternative modification programs are not as affordable as modifications made from the Making Home Affordable Program, and there have even been accusations that mortgage servicers are causing a Making Home Affordable Program modification to be more difficult to obtain than their in-house programs for the purposes of putting homeowners in these less desirable modifications, which will benefit servicers more than traditional modifications.

However, some have praised mortgage servicers for these alternative modification options as homeowners simply are unable to qualify or benefit from a modification from HAMP in some cases. It’s hoped that more homeowners will avoid foreclosure since various modification programs are in place that can offer a more affordable mortgage payment to homeowners who are currently struggling.