Wells Fargo and Wachovia Mortgage have seen various results in differing aspects of modification program, but one area that homeowners are concerned about deals with bankruptcy after they have been denied a home loan modification from the federal Making Home Affordable Program. Recent reports from HAMP have shown that there were ups and downs in the number of bankruptcies that have been seen over the past months, as some servicers saw a decrease, while others saw the total number of bankruptcies increase for homeowners either denied a trial modification or those who had their trial modification canceled.
There are some arguments that decreases in these numbers are the result of pending data corrections or loans that have been removed from a servicers portfolio, but the data from the most recent reports for Wells Fargo and Wachovia Mortgage have shown a decrease in the number of total bankruptcies in progress for homeowners in the federal modification program. Homeowners who had there trial modification canceled with Wells Fargo numbered at 803 as of the December 2010 report. This number for the same group of homeowners in January 2011 was 716, which again could be the result of certain bankruptcies being removed from a portfolio, but there are still some financial institutions seeing increases in these areas. Also, the number of homeowners facing bankruptcy who were not accepted for a trial modification numbered at 3,939, but that number slightly rose to 3,996 total bankruptcies that were in process as of the report.
Understandably, there are still issues that homeowners have with the modification program, which have led some to either foreclosure while others have had to file bankruptcy, but counselors and advisors are attempting to prompt more homeowners to explore extension plans that may be helpful for those in negative equity situation or who are unemployed. Obviously, Wells Fargo does also offer in-house mortgage assistance and modification help, but there are problems which have arisen in this area as well as some homeowners complain that costs are still too expensive, even outside of the federal modification plan.
While homeowners do continue to default in some cases, housing counselors from the Making Home Affordable Program had been used by individuals to give them a better chance at finding affordability at receiving a modification plan, as these counselors may be able to better guide homeowners through the process of applying for home loan assistance. Understandably, these modifications are no guarantee and there are still many individuals who feel both servicers and the program in general need to be restructured in how they help homeowners, but homeowners do need to be aware that foreclosure and bankruptcy are not always inevitable as there are programs beyond traditional modifications that may be able to help them in their particular situation.