There have been some indications that homeowners who are seeking underwater mortgage debt relief through options from the Home Affordable Foreclosure Alternatives Program may have more opportunities to either participate in short sales or a deed in lieu of foreclosure programs has expectations for the costs servicers must meet related to foreclosures will increase in 2011, and made bring more short sale and deed in lieu of foreclosure opportunities to homeowners who are in a negative equity situation.
Foreclosures have been a major problem for numerous homeowners across the nation, but again, as it’s believed mortgage servicers may incur a higher amount of costs associated with home loans in this area, short sale programs which are helpful to homeowners in an underwater mortgage situation who may be able to find a buyer for their home and deed in lieu of foreclosure programs which allow for a homeowner to surrender the deed to their home may be more widely used by financial institutions if these increases in foreclosure costs to servicers do indeed become problematic.
Obviously, these foreclosure alternatives are presently available from many of the nation’s top financial institutions as major servicers like Bank of America, Citigroup, Wells Fargo, and Chase all participate in the foreclosure alternatives through the Making Home Affordable Program, but there have been some homeowners who were denied this form of assistance on their home loan. Yet, these options are not always immediately available to homeowners in a negative equity situation as many servicers and the Making Home Affordable Program does require that homeowners in a difficult financial position and an underwater mortgage situation attempt to find assistance through a foreclosure prevention plan first.
If homeowners are unable to meet their mortgage payment, a home loan modification may be helpful, but there are some instances where homeowners do not qualify for these programs or are unable to sustain their mortgage payment even when a modification is offered. While there are also programs set to address issues like unemployment, homeowners who do not qualify for foreclosure prevention may then be able to use these foreclosure alternative methods as a way to avoid a formal foreclosure process.
While, again, foreclosure alternatives are not guaranteed, homeowners may be able to find more willingness on the part of their servicer to work with them when seeking either a short sale or deed in lieu of foreclosure agreement in the hopes that these homeowners can transition from their current home without acquiring the stain on their credit history that comes with a foreclosure.