Federal home loan modification assistance through either trial modifications or a permanent reduction in a homeowner’s payments through a modification are still options that many homeowners are seeking as financial difficulties plague homeowners still, as both underwater home loans and unemployment remains a problem that have caused some homeowners to find financial distress to such a degree that they can no longer afford their home. Obviously, many homeowners have been made aware of the federal modification initiative, and there are also private home loan modifications and federal extension programs as well, but there are still homeowners finding difficulty when it comes to achieving success in these various foreclosure prevention programs.
While some homeowners with Freddie Mac, for example, saw that there were 23,017 loan modifications completed during the first two months of 2011, the federal Making Home Affordable Program reported that, as of the January 2011 report, 539,493 active permanent modifications were currently on the books, which is an increase from 521,630 from the December 2010 report. Many major financial institutions like Citigroup, Bank of America, J.P. Morgan Chase, and Wells Fargo/Wachovia Mortgage are responsible for a great deal of these modifications, but some homeowners still feel that problems have arisen over the past months which should have been addressed earlier and have prevented many homeowners from affordability assistance.
Essentially, homeowners have found that there are problems when either dealing with their servicer, finding a payment within a modification program that is affordable enough for their particular situation, or there are some homeowners who feel that they have simply been denied an assistance plan through the federal modification program for little or no reason at all. There are some complaints that servicers are not held accountable for improperly implementing the federal modification plan and not adhering to the guidelines, but there are concerns as the Making Home Affordable Program is voluntary, yet, servicers did sign an agreement to adhere to federal guidelines when making these modifications.
Some homeowners feel that these financial institutions are not properly implementing modification plans, which has led to what many feel to be a dreary performance on the part of the modification program overall, but there are some financial institutions that have stated homeowners may have been to blame in many cases, despite the fact that accusations of improper foreclosure practices arose late last year. Some banks have stated that homeowners either do not properly file their paperwork, submit a letter of hardship, or simply do not qualify as some may have a mortgage payment that is only 31% of their total monthly income, which is the level that a modification would drop their mortgage obligation, and when this case is present a homeowner simply does not qualify for federal modification assistance.
However, homeowners are not being advised to simply resign themselves to foreclosure if financial troubles arise because there have been some success stories from both federal and private modification and foreclosure prevention efforts. Homeowners may want to contact a HAMP housing counselor before beginning the modification process, but state-specific foreclosure prevention plans from state housing agencies are also available if the federal and proprietary modifications are unhelpful for specific homeowners.