Bank of America homeowners who have been seeking home loan assistance have still faced problems that have led to either foreclosure or bankruptcy in certain cases, as data from the Making Home Affordable Program indicates that homeowners who were in the process of bankruptcy, in total for the duration of the program, continues to increase for many servicers and for Bank of America in the most recent HAMP reports. Obviously, there are factors that have led to homeowners filing bankruptcy or facing foreclosure that many feel could be addressed, but there are also other aspects of affordability that may be beyond the ability of a modification plan.
Yet, according to the February 2011 Making Home Affordable report, Bank of America saw 5,461 total bankruptcies in progress or having been completed for homeowners whose trial modification was canceled and, for homeowners who were not accepted for a trial modification, this bankruptcy number increased to 6,517. However, there are still those who question whether the modification program and servicers are to blame for homeowners facing these difficulties or if aspects of homeowner hardships, like the loss of income or excessive obligation are to blame and may not be helped by a simple modification plan.
It was reported in the February 2011 HAMP report that 78% of homeowners who had a trial modification offered were at least 60 days delinquent at the start of the trial, but there are still problems that are being seen in the form of homeowners continuing to miss payments after they have been offered a home loan modification trial or even permanent modification plan. Yet, this has also been an issue that proprietary home loan modifications have faced and despite the fact that there have been some instances where a servicer error was to blame, some feel that homeowners who are simply in a bad financial position in relation to unemployment or, again, excessive financial obligations, may not be in a position to benefit from a reduced mortgage payment and have either had to face foreclosure or chose to file bankruptcy.
However, there are still options that homeowners may be able to use outside of traditional modifications, as servicers like Bank of America do participate in programs like the Hardest Hit Fund and resources from housing counselors approved by HUD or the Making Home Affordable Program may also benefit homeowners who are going through the modification process or have received help from a modification plan. In some cases, homeowners may benefit from counseling if they are given a modification as the counselors may help them find more affordability through proper budgetary and financial practices in their personal financial life, which could cut down on the risk of them defaulting once again.
Yet, servicers like Bank of America, among many others, have not been perfect in their implementation of these mortgage modification programs, but there have also been increases in the number of permanent home loan modifications that Bank of America has seen despite increases in other areas like bankruptcy or foreclosures as well. While the modification program is not perfect, homeowners do still have these foreclosure prevention options available and are being prompted to either contact their servicer when financial troubles arise or their state’s housing agency to inquire about foreclosure prevention assistance that may be available through other federal programs.