Making Home Affordable Aid For Delinquent Homeowners And Questions About The Federal Modification Plan

The Making Home Affordable program has brought aid to delinquent homeowners and has allowed for individuals who may have faced foreclosure to avoid the loss of their home through lower monthly mortgage payments, but there are still many who question whether HAMP has been more helpful or harmful to homeowners, if more home loan modifications are being made, and there are officials who are asking whether the modification program should be allowed to continue or be terminated before its original expiration date.

There are some indications that the Making Home Affordable Program may only be helpful to a small number of individuals in need of these foreclosure prevention efforts.  HousingWire.com recently reported that, “Less than 20% of the estimated delinquent mortgages eligible for modification…have moved to the active permanent modification status.” Understandably, there are still numerous homeowners who are waging complaints about the modification program, but there are arguments that alternative programs, like state-specific assistance plans and proprietary modifications, are picking up in areas where the federal modification program may be unable to assist homeowners.

While the feelings on proprietary modifications are also mixed, reports have shown that more homeowners are receiving assistance through in-house modification efforts made directly from servicers than the federal plan, both of which have seen increases in the number of modifications made but are said to have struggled in the area of maintaining these modification plans. Many homeowners feel that a servicer’s particular home loan modification program may be more affordable as they can tailor the qualifications and payments to more easily fit each homeowner’s situation, yet there are still homeowners who have stated that these programs are too expensive, difficult to qualify for, or simply may be more hurtful than helpful.

However, the Hardest Hit Fund is also one of the programs that many homeowners have been able to take advantage of when it comes to finding assistance for problems like unemployment and underwater mortgages, when it relates to a homeowner’s ability to make the mortgage payment. These programs may offer 0% interest loans that could be forgiven or assistance more like grants to homeowners who are behind on their mortgage, unemployed, or who may be a negative equity position.

There have been officials who oppose these initiatives though and there are some proposals to eliminate numerous foreclosure prevention programs, like the Home Affordable Modification Program. While some indications have shown that opponents of these programs may be willing to restructure home loan assistance plans so that they can be more helpful to a wider number of individuals, there are questions as to whether these initiatives are causing homeowners more financial distress rather than aid. Some homeowners have complained that the simple process of acquiring a modification has caused them to eat through their savings account, miss payments on their mortgage, and do damage to their credit score which puts them in a difficult financial position, especially when a modification is denied.

While there are some indications that housing counselors have been helpful to homeowners in these situations, individuals who are struggling to make the mortgage payment do still have modification opportunities that may be beneficial for their personal situation, but many officials are still of the mind that changes must be made before these programs will be more helpful to a greater number of homeowners and would warrant continued funding.