Each month the Treasury Department has released information regarding the federal home loan modification program, and while there has been coverage on individual lenders, the overall home loan modification program has seen increases in terms of the number of permanent home loan modifications that are currently active, which can be seen in a positive light by homeowners who are in a position where certain hardships are in place and they are in need of lower home loan payments. While not every mortgage servicer saw an increase in the number of permanent modifications they have made, the total number reported from the Treasury Department has shown not only increases in this area but homeowners are continuing to report reasons as to why they are seeking a more affordable mortgage payment as this program is ongoing.
The latest Making Home Affordable Program report stated that the active permanent modifications that were tracked as of March 2011 stood at 586,916, which was an increase from the previous month but there are also indications that homeowners who are facing hardships that have necessitated they seek out a home loan modification plan are usually those who have experienced a sudden loss of income due to either a reduction in their wages or unemployment. In fact, over half of all homeowners who are facing hardships have indicated that this is the primary reason for their need of a permanent home loan modification.
There are some individuals who may have simply bought more house than they could afford, but there are issues related to factors like negative equity that are also in place and may be one reason that homeowners are facing setbacks in their financial life. However, when homeowners are applying for a home loan modification plan, particularly a modification from the federal initiative, these hardships must be clearly outlined as documentation issues has been one of the problems that homeowners have faced over the past months. While it has been exhaustively stated that housing counselors, like those from the HOPE Now network, can be beneficial in helping homeowners organize their home loan modification application, homeowners need to understand that they have to provide proof that they are struggling to make their mortgage payments because of issues that may be beyond their control.
While certain factors may have attributed to unemployment or a reduction in a homeowners income, showing a servicer that a homeowner has suffered this financial setback is vital so that a home loan modification plan can be more easily acquired, as there have been setbacks for many homeowners over the past months. Essentially, homeowners who are having trouble dealing with their servicer may want to focus on this area, as it has been indicated in the past that homeowners who may have had a less troubling experience in the modification program are those who have documented that, without financial setbacks like unemployment or a reduction in their wages, they would be able to meet their debts and make their mortgage payment.
Once again, homeowners may need to seek assistance from a reputable housing counselor if they are having problems in this area, but as permanent modifications are on the rise in general and with particular servicers, homeowners must make sure that they are giving reasons as to why this modification is necessary, since many financial institutions may be more willing to help homeowners who are in a situation where foreclosure may be affordable if payment assistance and affordability options are made more available.