Citigroup’s foreclosure prevention plans through home loan modification efforts within the Making Home Affordable Program had helped some homeowners throughout the previous month’s find a more affordable monthly payment on their mortgage, which has helped them avoid the loss of their home. However, Citigroup and other servicers have come under criticism concerning the conversion rates of homeowners in a trial modification to a permanent home loan modification position, as there are some who feel that homeowners are not qualifying for permanent modifications at a rate which is helpful to the overall recovery of housing and assisting the maximum number of homeowners that could be aided.
Obviously, there are some difficulties on the part of homeowners which have made offering permanent modifications problematic for servicers as numerous financial institutions have reported that there are homeowners who either do not meet federal qualifications for a permanent home loan assistance plan or who continually missed payments within the trial modification period, which obviously disqualifies them from a permanent modification after their three month trial period.
Yet, according to the Making Home Affordable report for November 2010, there are numerous servicers who have had age trials in place for at least six months, and this obviously has brought concern on the part of some homeowners who seemingly cannot transition out of these trial modifications. Citigroup, as an example, has 4,584 active trial modifications which are considered to be aged trials, again meaning these homeowners have been in a trial plan for six months or longer.
There have also been questions over the foreclosure practices of some banks, which have let homeowners to accuse financial institutions of not doing all they can to prevent foreclosure through modifications, but as servicers like Citigroup have seen increases in the number of not only federal permanent modifications they have made during 2010, but also proprietary, in-house modification programs which have been helpful to the numerous homeowners, there is concern over factors like unemployment which may be preventing homeowners from receiving these permanent modification assistance plans.
Obviously, homeowners who are unemployed cannot qualify for a federal Making Home Affordable modification program due to the fact that they may either have no income or their only income is from unemployment benefits. While Citigroup and other servicers do offer extension plans, like the Home Affordable Unemployment Program as a way to provide forbearance opportunities for unemployed homeowners, there is still the problem of homeowners either missing payments within a modification or simply improperly filing paperwork which may deny them a trial or permanent modification plan.
It goes without saying that there have been problems on the part of servicers and homeowners alike, but for homeowners who are having difficulty transitioning out of a Making Home Affordable trial modification, advisers have often prompted these individuals to either speak with their servicer or consult an approved housing counselor for guidance in modification program. Understandably, these modifications are not guaranteed for homeowners as some simply do not qualify or are, again, unable to meet modification payments. Yet, for those troubled homeowners who have been making on-time payments, they may need to take further action or talk with their servicer in order to see if there is something hindering their movement into a permanent home loan modification plan.