Making Home Affordable Home Loan Modification Program Proposed Changes–How Restructuring Could Help More Homeowners

The Making Home Affordable Program has not been seen in a positive light by many officials and there have been some who feel that the program should be ended as it is detrimental to the housing market, unhelpful to homeowners, and has been a financial drain in terms of the number of homeowners that have been helped versus the original amount proposed to have been aided through these modification efforts. However, it’s highly unlikely that the Making Home Affordable initiative will end despite the House of Representatives voting to terminate HAMP, but there have been proposals to restructure the program which could be more beneficial to homeowners who have had a difficult time applying for foreclosure prevention assistance and those who may need modification aid in future.

According to HousingWire.com, changes and the modification program would include, “…a single-point of contact between the borrower and the servicer, ending the practice of pursuing a foreclosure and a modification simultaneously, and requiring an independent review of loan modification denials.” Obviously, these changes could go a long way in helping homeowners avoid any confusion within the modification program, avoid issues related to lost paperwork, and in the case that a homeowner is denied a modification, if an outside party were to review the modification application and compare them to program guidelines, this may lead to fewer mistakes.

Yet, there are still some homeowners who feel that more needs to be done as the blame for failure to see more success within HAMP has been put on the shoulders of servicers by some frustrated individuals. It stands to reason that these men and women are angry at being unable to acquire a more affordable monthly mortgage payment on their home loan, but the Department of Treasury has stated that they did not have authority to fine the financial institutions who do not adhere to program guidelines, due to the fact that participation in the modification program has not been mandatory, but a proposed rating system of these banks will begin in the coming weeks and will reflect their performance in the program thus far.

While there have been increases seen in the number of modifications within the federal foreclosure prevention program and reports have also indicated that private home loan modifications have seen more success. Yet, issues like redefaulting due to the inability to sustain modification payments is one of the main causes that homeowners have eventually failed out of HAMP as continued unemployment and negative equity are still causing problems not only in the housing market but in the lives of many homeowners. These proposed changes would hopefully make the modification process more accessible to a greater number of homeowners, or could correct any mistakes that have been made and allow the overall number of homeowners helped to increase, but at the present time, homeowners do still have modification plans available despite the fact that there are still difficulties that remain present in the program.