Federal Home Loan Modification Program And Permanent Modification Plans–Have Homeowners Received Aid?

Federal Home Loan Mortgage modification programs have been sought out by a number of homeowners this year as a way to obtain a permanent modification on their home, which will provide the affordability that many need during these difficult financial times. Numerous financial institutions like Bank of America, Citigroup, J.P. Morgan Chase, Wells Fargo, GMAC Mortgage, just to name a few, have been participating in the federal Making Home Affordable home loan modification program, but there are questions as to whether this financial assistance opportunity has been helpful for homeowners or if lackluster results are all that have been seen this year.

Homeowners, obviously, have had a great deal of difficulties concerning their working relationship with servicers and, as a result, many have waged complaints against financial institutions and their implementation of these federal modification plans. There are some indications that homeowners may have been treated unfairly within the Making Home Affordable Program by certain servicers, but there are also problems on the part of homeowners as some have simply not submitted the proper paperwork, been able to sustain the payment program within a modification trial period, or did not qualify for a federal modification.

While both servicers and homeowners have had their troubles and the federal modification program in general has not been perfect, there have been increases over the past months in the number of permanent home loan modifications that homeowners have seen. As an example, the September Making Home Affordable report stated that there were 466,708 active permanent modifications, but that number increased to a total of 483,342 active permanent modifications for the month of October. These numbers are also a drastic increase from the 116,297 permanent modifications which were reported in the January 2010 Making Home Affordable report.

Yet, there are homeowners who still feel that servicers are unhelpful by and large, or modification programs are set in place to only help a minimal number of homeowners. Understandably, many homeowners have been frustrated at the prospect of losing their home to foreclosure and have become angry when a modification program was unavailable or canceled within the federal mortgage assistance plan. However, there are alternatives to federal modifications through proprietary home loan mortgage assistance plans which have been helpful to numerous individuals over the past months.

While no servicer, modification program, or homeowner may be perfect when it concerns qualifying for or implementing these modification plans, it’s hoped that with continued options for federal and alternative modification programs, along with extension programs to address issues like unemployment, second liens, and underwater mortgages, more homeowners may find both the affordability in their home and foreclosure prevention assistance they need in the coming months.