Recent revelations over the federal home loan modification program has many concerned that the initial goal of homeowners who were to be helped will fall short when the program concludes. Obviously, there have been difficulties in the home loan modification program as many homeowners have had trouble dealing with mortgage servicers, the intricacies of the program, and there have also been accusations that some financial institutions simply did not adhere to program practices and guidelines which disqualified some homeowners from foreclosure prevention assistance.
Yet, as homeowners continue to seek aid concerning their mortgage, there is good news concerning proprietary modifications which are made directly from mortgage servicers. Reports have indicated that more homeowners are beginning to see success through these in-house home loan modification programs, which may be a more popular option in 2011 if the federal modification effort continues to struggle.
While there are still home loan modifications available through the Making Home Affordable Program, there is some concern over the fact that only about one quarter of the homeowners who were originally stated to receive assistance from the federal modification plan may actually find the foreclosure prevention aid they seek, and questions as to where blame falls as a result have arisen.
Opinions differ in this area as, obviously, homeowners put the blame at the feet of mortgage servicers, since again, there are many individuals who feel that financial institutions have not done all they could to usher homeowners through the modification program in a timely manner and provide sustainable, long-term affordability for troubled homeowners.
Yet, many banks often point out that homeowners have either not properly submitted paperwork, simply do not qualify due to their debt-to-income ratio, or there are problems related to extended levels of unemployment and redefaulting. Obviously, there are homeowners who simply do not qualify for federal assistance and cannot sustain payments even when a modified mortgage is offered, however there are homeowners who feel the amount of individuals who have been booted from the program are far too many because of servicer error.
The good news, though, is that these proprietary, in-house modifications do offer an alternative to the federal modification program and, again, there are increases in the number of homeowners who are seeing permanent modifications from these alternative plans. It’s true that there have been reported problems within these proprietary modifications in some cases, but there are many homeowners who are seeing the affordability they need to avoid foreclosure through these in-house plans as financial institutions are able to work one-on-one with homeowners and tailor modification programs to meet particular homeowner needs.