Wells Fargo and Wachovia homeowners seeking a home loan modification plan have reportedly been able to find the affordability they need thanks to interest rate reductions and term extensions offered by their servicer. According to the most recent Making Home Affordable Report, homeowners who were entered into a permanent modification agreement saw an interest rate reduction 100% of the time and over half of the homeowners in an active permanent modification status received a term extension.
Obviously, there have been homeowners who had attempted to refinance their home loan thanks to low interest rates which were available throughout 2010, but homeowners who were in a bad situation in their personal financial life typically either could not afford the costs of refinancing or may not have qualified for a significantly lower interest rate that would make refinancing beneficial, yet modifications have been able to offer similar benefits through these rate reductions and term extensions.
While there are various servicers who have implemented different methods for lowering home loan costs, Wells Fargo/Wachovia Mortgage is one of the financial institutions that not only offers these federal modifications but proprietary plans as well that use similar methods to lower home loan costs for homeowners who face defaulting on their home loan. There are difficulties associated with problems like underwater mortgages, but homeowners have been able to see assistance with their home loan principle in some cases as well.
According to the Making Home Affordable Report guidelines, homeowners who are granted a permanent home loan modification are able to receive a principal reduction on their home loan of $1000 per year for five years. While this may not help homeowners in a severe negative equity situation, there are some mortgage servicers who feel that when it comes to the affordability of a home, principal reductions do little to lower the costs a homeowner must face in terms of month-to-month payments.
It goes without saying that homeowners in a negative equity situation have been seeking a principal assistance options, most commonly through principal forgiveness, yet, there are ways which these individuals may find the affordability they seek when it comes to meeting their month-to-month payment obligation. Again, federal home loan assistance plans from Wells Fargo/Wachovia may be able to address homeowner payment issues, but for those who have had trouble with the Making Home Affordable Program, there are proprietary modifications available as well, and homeowners have also turned to housing counselors as a way to find the guidance that may help increase their chances at finding affordable foreclosure prevention aid.