There are proposed changes for the Making Home Affordable home loan modification program, as it is hoped that by restructuring the program, tweaking problems that may have been the source of hindrances, and simply prompting changes in the methods that are used by servicers, it’s believed that more homeowners may be able to find the help they seek through the federal home loan modification program. Obviously, there is a great deal of disagreement on the home loan modification issue as there are some officials who feel that homeowners have benefited from this program, while others have deemed the program to be a failure and feel that it should be eliminated.
However, a report on HousingWire.com made mention of some of the changes which may be in store for the home loan modification program, one of which states that if a homeowner feels they have been unjustly denied a home modification, they may be able to qualify for a reevaluation of their mortgage assistance pursuits, which with the help of new Treasury programs, may offer more homeowners the option to overcome a frustrating situation when they have been denied the assistance they need to remain in their home.
Many of the major financial institutions that participate in the Making Home Affordable Program have seen increases in the number of permanent modifications they have made over the past months but there are still many officials who feel that changes and upgrades to the program could be greatly beneficial in assisting the maximum number of homeowners that could possibly benefit from this program throughout 2011. Recently, a testimony by the Chief of the Homeownership Preservation Office, Phyllis Caldwell, stated that, “…effective outreach to homeowners is difficult due to the complexity of the challenges they face, and their understandable mistrust of servicers. Homeowners often are not aware of the free resources available to them, and servicers all must increase efforts to reach them.”
Calls for servicers to become more proactive in helping homeowners avoid foreclosure are becoming more common as there is concern that either homeowners are unsure about their foreclosure prevention options or may be confused about the application process and, as a result, many improperly file for a modification or disqualify themselves from finding the assistance they need. Yet, there are many individuals who feel that the confusion in the program is the fault of many mortgage servicers due to the fact that homeowners have complained they have repeatedly provided documentation to their financial institution only to be denied home loan assistance or do a great deal of damage to their credit and financial situation trying to stay afloat while they are considered for a modification.
While proposed changes by the Treasury Department through call centers and reevaluation efforts for homeowners, will hopefully address some of the issues that many have faced when it comes to either qualifying for a modification or being denied a modification when a homeowner feels they have met all of the requirements, there are still proprietary home loan modification plans that are seeing a higher success rate than the federal modification program, which can give homeowners an alternative option if the federal home modification plan does not provide them the foreclosure prevention assistance they need. Hopefully, in 2011, renewed efforts by servicers and governmental departments, like the Treasury Department, will make foreclosure prevention more accessible to troubled homeowners who are still feeling the weight of factors like unemployment, negative equity, or other financial distress from the recession.