Homeowners with Citigroup who were pursuing a home loan modification often fall into a situation where they are not offered the assistance they need to provide the affordability in their mortgage payment which will prevent foreclosure. Data from the October Making Home Affordable servicer report has shown that homeowners do still continue to face foreclosure when they are not offered a modification from the federal mortgage assistance program.
Obviously, there are cases where homeowners simply cannot afford their mortgage, even if a modification plan is in place, and as a result some have seen foreclosure on their home. As an example, 11,678 homeowners who had their trial modification canceled by Citigroup within HAMP faced foreclosure starts, according to the report, and 1,341 foreclosures were completed for the same group of homeowners as of August 2010. However, in the month of October, which tracks data through September for these homeowners who face foreclosure after the cancellation of their trial modification, foreclosure starts dropped to 11,477 and completions increased to 2,561.
While it’s understandable that no homeowner wants to face foreclosure, the October report from HAMP seems to suggest that fewer homeowners are facing foreclosure starts when they have had their trial modification canceled. Typically, Citigroup and other servicers cancel a homeowner’s trial modification when problems arise concerning documentation, a homeowner’s debt to income ratio, or when homeowners fail to meet payments and default within the trial plan.
Numerous financial institutions have had default problems from homeowners, but there are concerns that banks are not doing enough to prevent foreclosures on a wider scale. Yet, factors like job loss and a slow job market are some of the main causes which have led to homeowners simply being unable to meet their mortgage payment costs even when a more affordable payment plan has been presented.
Again, foreclosure starts for some homeowners in the Making Home Affordable Program have seemed to slow with Citigroup, but there are still troubles that remain for many who are attempting to find foreclosure prevention aid through traditional modifications. Yet, alternative home loan modification plans and HAMP extension plans are also being implemented by many mortgage servicers in the hopes of preventing more homeowners from losing their home in the coming months.