J.P. Morgan Chase homeowners may be able to take advantage of deed in lieu of foreclosure plans or short sales as a way to avoid a formal foreclosure process when a home loan modification is unsuccessful. Homeowners with Chase and a variety of other servicers have seen either the cancellation of their trial modification or have not initially been accepted for a federal trial modification program within the Making Home Affordable plan, but there are those who have taken advantage of extension plans like the Home Affordable Foreclosure Alternatives initiative.
According to recent reports from the Making Home Affordable Program, Chase did see an increase in the number of short sale and deed in lieu of foreclosure plans which were in process at the time of these reports. For homeowners who were not accepted for a trial modification, the November report from the Making Home Affordable Program, which tracks data through the month of October, stated that Chase had 7,768 homeowners in the process of either a short sale or deed in lieu of foreclosure plan. This was up from the previous month which reported that only 6,864 homeowners who are not accepted for a trial modification were currently in the process of one of these alternative programs.
Also, homeowners who had their trial modification canceled but where the process of a deed in lieu of foreclosure program or a short sale numbered at 4,918 as of October 2010, which was up from the previous month where it was reported Chase had only 3,975 homeowners in this category.
However, it is to be understood that not all homeowners who have their trial modification canceled or were not accepted for a trial will be able to take advantage of these plans as deed in lieu of foreclosures and short sale options are not always granted by a servicer. Yet, homeowners who have not been successful at obtaining either a trial or permanent modification may request one of these options from their servicer in the hopes of avoiding a formal foreclosure process and, potentially doing damage to their credit score as a result.
Some homeowners who have been able to take advantage of these foreclosure alternative plans may be able to reenter the housing market in a shorter period of time than homeowners who face foreclosure, file for bankruptcy, or strategically default on their mortgage. Chase is one of the mortgage servicers who may also offer proprietary home loan modifications for homeowners, which is another option for finding affordability and monthly mortgage payments, so this may be an avenue that homeowners can explore no matter their servicer, as the majority of financial institutions in the federal modification program also offer in-house assistance plans.
However, requesting a short sale or deed in lieu of foreclosure plan can be helpful for homeowners who are simply in a position where they cannot afford their mortgage even if a modification plan is present, as this could help homeowners alleviate themselves of a difficult financial burden and, in some cases, avoid detrimental effects to their credit score.