Bank of America’s home loan modification program implemented as a way to provide foreclosure prevention to homeowners in a distressed mortgage situation has seen increases in the number of permanent modifications over the past month, but there are still some issues with homeowners converting from modifications into a permanent home loan modification plan. There are servicers who have had homeowners in a trial modification program for longer than the traditional three-month trial phase, but there are arguments on both sides of this issue as to why homeowners may be having a troubling time finding a permanent modification plan.
According to the Making Home Affordable report before November 2010, Bank of America had 19,795 aged trial modifications, which are active trial modifications that were initiated at least six months prior to the report. Obviously, many see this as a large number of homeowners who have, essentially, been held in a trial modification for double the amount of time which is traditional for homeowners who are seeking a permanent modification. As of the November report, Bank of America was reported to have started 342,602 trial modifications, but currently only have 46,749 that are active.
Problems that are usually credited to this lack of conversion on the part of many servicers can often be traced back to fault on the part of the servicer, the homeowner, or a combination of both. Obviously, there have been problems with servicers losing paperwork or not properly processing a homeowner’s documents, which may have led to a homeowner being denied modification assistance, but there are also reports of homeowners who are either improperly filing a modification application or are defaulting once they are in a trial modification program.
While Bank of America is just one of many servicers who has seen troubles related to home loan modification efforts, there are still federal and proprietary home loan modifications being offered to homeowners who may face foreclosure without help. Obviously, personal financial factors in the lives of homeowners and trouble on the part of lenders has led to difficulties in the trial modification process, but advisers have often suggested that homeowners take steps to ensure they have the best opportunity at finding a mortgage modification foreclosure prevention plan.
Homeowners can contact their servicer directly and begin working to find mortgage assistance if they fear financial troubles are on the horizon, or in some cases, homeowners may contact a reputable housing counselor, which could help homeowners get organized and enter into a home loan modification program in a manner which gives them the greatest chance for success. However, while home loan modifications are still no guarantee, homeowners who address potential financial issues early will obviously have a better chance at finding a solution than those who perhaps wait until they have begun missing payments on their home loan and are in an imminent position where they risk defaulting.