Alternative home loan modification assistance has been available from various financial institutions through in-house programs aimed at directly helping homeowners through servicer assistance plans, rather than federal initiatives for foreclosure prevention. While there have been mixed results in modification programs, overall, it has been reported that the servicers completed 73,000 proprietary home loan modifications in January 2011, which is part of the data compiled by Hope Now.
However, there are still concerns over the fact that modifications in general have not been as helpful to homeowners, due to the fact that there are issues which many individuals may have concerning their particular mortgage servicer. Some of the problems that homeowners and officials have with modifications, be they private or federal, concerns the cost, the long-term advantages, and their ability to prevent foreclosures. While there are a great deal of issues related to the federal Making Home Affordable Program, to the point that officials have called for the program’s termination, there are also concerns that private modifications may have a higher redefault rate than federal modification plans.
Yet, major servicers like Bank of America, Chase, Citigroup, and Wells Fargo are just a few of the participants who offer these proprietary modifications and, as a result, may be able to reach more homeowners who could be ineligible for the federal Making Home Affordable Program. However, there are some who have argued that the costs of these proprietary modifications can be more expensive, in terms of monthly payments, than the federal modification plan and with outcries of shortcomings within HAMP as a result of homeowners being unable to sustain these lower mortgage payments, questions as to whether proprietary modifications are helpful remain.
Homeowners, though, do still have these foreclosure prevention options through modifications, as not only are federal and proprietary opportunities still in place, but there are extension programs that could be beneficial for homeowners to address issues like negative equity or unemployment. However, there are still calls for homeowners to explore these options early if they fear financial troubles may arise, due to the fact that there are still both of these paths that may be available to homeowners, even if they have not been perfect in their implementation and ability to help homeowners avoid foreclosure.
While, again, some homeowners may have trouble qualifying for the federal modification program and there are difficulties still being seen from in-house modifications, there are resources, like housing counselors suggested by HAMP or the FHA, that could help men and women in a difficult financial position either find solutions so that they can meet their mortgage payment or there are forms of assistance to guide homeowners through modification plans, which may make the process less stressful and offer a higher rate of success for these homeowners in need.