Home loan modifications being made in 2011 have seen increases in the first two months of the year, as many major financial institutions like Bank of America, Wells Fargo, and J.P. Morgan Chase have seen increases in the number of permanent modifications that have been made, but more so, the overall number of active permanent modifications from the most recent HAMP reports have shown increases and there are further efforts reportedly being made to improve the home loan modification process.
According to the January 2011 Making Home Affordable Report, the total number of active permanent modifications stood at 539,493 but that number increased according to the February 2011 report to 557,076. Obviously, continual increases in the active permanent modifications within HAMP are a good sign for homeowners who are still struggling, but there are homeowners who feel that the modification program and servicers need to correct numerous problems so that the application process may be easier, the modification programs more affordable, and more sustainability could lead to homeowners remaining in the program longer and more individuals being helped along the way.
One area where officials hope to improve the modification program is in the point of contact that homeowners make with representatives from their servicer. According to a report on Housingwire.com, a rule that is set to begin in April will require that servicers dealing with mortgages not held by government-sponsored Fannie Mae or Freddie Mac offer this point of contact homeowners so that the application process may be less marred with problems related to lost paperwork or confusion. While the Treasury also has allowed homeowners the opportunity to appeal modifications that were denied by their servicer, many hope that this single point of contact rule can be more beneficial to homeowners, as there are some banks that may have already implemented this process.
Obviously, homeowners are incredibly frustrated when dealing with their bank and seeking a modification, but when homeowners have to repeatedly submit paperwork, miss important dates because documentation may have been lost, or are continually bounced around from one representative to another, this not only hinders the modification program from being helpful but obviously causes some homeowners to simply give up as they feel they can’t fight their potential foreclosure. There are homeowners who have felt helpless in the face of what seems to be an incredibly complex process, despite the fact that there are, again, increases in the number of modifications that have been seen.
Yet, with various foreclosure methods being implemented like in-house modifications, expansion plans from HAMP and the Hardest Hit Fund Program, federal modifications are still one of the more widely known options for foreclosure prevention that homeowners primarily seek, and if improvements to the program like the appeals process and a single point of contact from servicers continue to make the program more accessible to a greater number of homeowners, issues that homeowners have faced over the past months may be greatly reduced and more homeowners may find the help they need in 2011 to avoid the loss of their home through this particular federal program.