Citigroup Homeowner Bankruptcy After Failing To Find Help From Home Loan Assistance Plans–January 2011 Report

Citigroup homeowners who are facing bankruptcy after being unable to either complete a trial modification and receive a permanent home loan assistance plan or those who may have been initially denied a trial modification have seen mixed results in data reported by the Making Home Affordable Program as there have been ups and downs in terms of the total number of bankruptcies that have reportedly been either in process or are currently in process for those distressed homeowners in HAMP.

 

According to the January 2011 report from HAMP, the total number of bankruptcies reportedly resulting from Citigroup denying homeowners a permanent modification through the cancellation of their trial plan stood at 3,623. This number is down from the previous report where 4,057 total bankruptcies have been tracked to date, but this reduction could have also been the result of some bankruptcies being removed from the servicer’s portfolio.  However, when it comes to homeowners who were not accepted for a trial modification, the total number of bankruptcies reportedly in process increased to 7,491 from 7,280.

 

These comprehensive totals from the most recent Making Home Affordable Report show that there are still issues like foreclosure and bankruptcy that homeowners are facing when they have been unsuccessful at either acquiring a trial or permanent home loan modification plan. Yet, homeowners are still being prompted to make contact with their servicer early if they have continued financial difficulties that may result in missed payments or defaulting down the road. Issues like unemployment and negative equity can be addressed through the Making Home Affordable Program, but many servicers are also seeing homeowners aided through state-specific plans like the Hardest Hit Fund.

 

Also, homeowners can contact housing counselors approved by the Making Home Affordable Program and the FHA, which could be beneficial in helping these individuals sort out financial troubles that may be in their life. Counseling services may be more beneficial for homeowners struggling financially who have yet to miss a mortgage payment, as those who have already missed payments on their home loan are typically in need of a modification, but in these cases housing counselors may be of assistance as well.

 

Understandably, many homeowners are either defaulting strategically, meaning they are simply walking away from their home, are filing bankruptcy, or are simply resigned to the fact that they are going to lose their home to foreclosure, but these preventative measures are still in place to help homeowners maintain affordability in their mortgage payment and, if factors like unemployment are in place, help homeowners avoid missed payments while they continue to look for work.

 

Citigroup homeowners are just a few of the many individuals who are finding that they are in a position of financial distress, but these plans are available for a wide number of men and women despite the fact that there have been issues which have arisen. Homeowners need to understand that there are problems within the modification program and with various servicers, so foreclosure prevention is not always guaranteed, but talking directly with a mortgage servicer, consulting counselors, and inquiring about either the Hardest Hit Fund or both federal and proprietary modification programs could give homeowners options to save their home or, in some cases, foreclosure alternatives like short sales may be available if these plans are unhelpful for a homeowner’s particular situation.