Home loan assistance for those who are seeking foreclosure prevention aid outside of the Making Home Affordable Program have typically come in the form of alternative, proprietary home loan modifications as there are many servicers who have seen more success with direct modification aid rather than offering homeowners assistance from the federal modification initiatives. Obviously, home loan modifications have been hotly debated in terms of their usefulness and sustainability, but with more homeowners seeing success through these in-house modification plans, there are options for homeowners who may not qualify for a traditional HAMP modification plan that could come directly from their servicer.
Many of the nation’s top mortgage servicers who participate in the Making Home Affordable Program, like Bank of America, Wells Fargo/Wachovia, Citigroup and J.P. Morgan Chase, are some of the major institutions that can offer homeowners alternative assistance outside of the modification program, as there are some who have been able to benefit from both proprietary and federal modification programs. Sustainability is obviously the key to preventing foreclosure for homeowners who are struggling to make their mortgage payments, but there are still issues which have arisen in this area as well.
Early in 2010, homeowners who were in a decent financial position had the option of refinancing their home loan to take advantage of record low interest rates that were being seen. Homeowners who refinanced to a longer mortgage, like a 30-year fixed rate mortgage were able, in many cases, to get a reduction in their monthly mortgage payment to a more affordable level, while others could refinance to a 15-year fixed rate mortgage, as example, and reduce the overall amount that they paid on their home loan once they had erased their mortgage debt.
Yet, homeowners were and are still mired in the housing market and have had trouble finding affordability when it comes to their home loan payment due to the fact that some do not qualify for home loan modifications because of financial troubles related to unemployment or because their home loan is underwater. While the home loan modification program implemented by the federal government has helped some, there are many who feel that this program should be terminated because it has basically been unsuccessful despite the fact that there have been homeowners helped.
Some believe that these alternative modifications given directly from servicers could aid more homeowners in their foreclosure prevention efforts and, in terms of the federal modification plan, this program could be terminated and funds used to reduce the national deficit. While there are current proposals to cut HAMP, homeowners who worry that there may be no options available for receiving a mortgage payment that is more affordable can, again, consult with their servicer about alternative modification plans directly from in-house initiatives, or housing counselors have been beneficial in formulating budgets which have aided homeowners in their pursuit of a more affordable monthly mortgage payment.
While factors like unemployment remain a major hindrance for homeowners making their mortgage payment and underwater mortgages continue to drag down the housing market in many ways, homeowners who can benefit from modifications do still have these proprietary modification options available from many major mortgage servicers and, as a result, it’s hoped that homeowners who can both acquire and sustain modification payments will be able to do so in the coming months and hopefully reduce widespread foreclosures that had been predicted.