Bank of America’s home loan assistance initiatives to aid delinquent homeowners is one of many programs with a variety of financial institutions as numerous mortgage servicers have attempted to address affordability issues that are being faced by homeowners across the nation, yet, there are recent reports that the Making Home Affordable Program may not be available to a wide number of homeowners, as a sample of homeowners tracked with Bank of America showed a low conversion rate.
Many lawmakers have been calling for the termination of the Home Affordable Modification Program, as there are those who feel the program is greatly flawed due to the fact that it causes more trouble for the majority of homeowners than it seems to present solutions to those in need. One example of this is that the original goal that was set for HAMP will not be reached, but there are still defenders of the modification plan. However, there are also accusations that the modification plan causes more financial distress to homeowners as many are either delinquent on their mortgage before they can qualify or may have to use a great deal of their savings while waiting for the modification process to take effect.
Sadly, there was a report that only 14% of delinquent homeowners with Bank of America actually qualified for a permanent federal modification program. While there are a great deal of reasons as to why a homeowner may not be able to acquire federal home loan modification assistance, these difficulties which are being seen are not solely being faced by Bank of America homeowners, as individuals with a variety of servicers have reported similar problems that were tracked during the Bank of America sampling of delinquent homeowners pursuing a permanent modification.
For months there have been accusations by homeowners that banks were not doing enough to allow distressed individuals the opportunity to receive lower mortgage payments on their home loan, but there are problems on both sides of this equation that many officials need to be addressed, despite the fact that there have been changes in the loan modification program since its inception.
Homeowners have complained that servicers repeatedly lose their paperwork or unjustly deny homeowners the assistance they need, while there are some banks, like Bank of America, that have claimed some homeowners simply did not follow the application processed properly, submit documentation that was necessary for entry or success in the modification program, and there are those homeowners who simply fell below the requirements that had to be met, in terms of their monthly income.
Essentially, the modification program was hoped to help homeowners by offering them a mortgage payment that was at or below 31% of their monthly income, in the hopes of allowing these individuals to more easily afford their mortgage payments during times of financial hardships and, in the future, when homeowners have found a more stable financial ground, they may be able to either resume traditional mortgage payments and, obviously, would have avoided foreclosure. Yet, some homeowners were already in a position where they were only using this percentage or less of their income to pay their home loan.
While there are mixed views on the modification program that remain, homeowners who are struggling to stay afloat do still have the opportunity for federal modification assistance, as well as, alternative loss mitigation programs directly from banks and state mortgage assistance plans from the Hardest Hit Fund. While these routes to foreclosure prevention have been trying for some, homeowners are still being prompted to address financial issues early with either their servicer or counselors from the Making Home Affordable Program so that a proper assistance plan may be found for their particular situation.