Bank Of America Home Loan Assistance To Avoid Bankruptcy–Can Modifications Help Homeowners?

Bank of America’s home loan assistance plans to help homeowners avoid bankruptcy has mostly been through home modification programs which have been implemented through either in-house plans or the Making Home Affordable Program. Obviously, foreclosure and bankruptcy are two of the results that homeowners who are in financial distress are fighting to avoid, but there are questions as to whether modifications have been able to help homeowners avoid filing bankruptcy due to financial distress and reports from the Making Home Affordable Program have shown mixed results in this area.

For Bank of America, the December Making Home Affordable report stated that there were a total of 3,435 bankruptcies that had been in process as of November 2010, for homeowners who were not accepted for a trial modification. This number was a drop from the previous month’s report where it was stated that a total of 3,629 bankruptcies had been filed as of the report’s release. These numbers are cumulative for each servicer throughout the home loan modification program, and are part of the disposition paths that are tracked with various servicers who participate in HAMP.

While this drop in the total number of bankruptcies that were in process while these reports were released may point to positive signs for homeowners who did not receive a trial modification, the number of homeowners with a bankruptcy in process who had there trial modification canceled numbered at 4,492, which was up from the previous month’s report of 4,409.

Obviously, homeowners who are facing a great deal of financial distress are often looking for ways to simply bring about more affordability in major areas of their life, like their mortgage, and servicers like Bank of America have been crucial in keeping these homeowners in their home so as to avoid more foreclosures than have already been seen. However, there is concern that 2011 may see a continuation of these foreclosures, but there is hope that as economic conditions and the job market improves, as well as, homeowners being offered foreclosure alternatives and resources outside of the Making Home Affordable Program, more troubled homeowners may find solutions to their financial troubles.

Homeowners who are struggling have been prompted to contact their servicer early or consult a HUD-approved housing counselor to assist them with any financial distress that may be present in their life, yet could be repaired to allow them to continue making mortgage payments. There are homeowners who need help and guidance in the modification program, which can also be acquired through these counselors, but taking a proactive approach to foreclosure prevention and bankruptcy avoidance is something that advisers are imploring homeowners to do so that one of the numerous homeowner assistance plans currently in place may benefit them and they can avoid the loss of their home.