Data released in the early part of May which has tracked alternative modifications from proprietary plans offered directly by many major financial institutions that service mortgages have shown that, over the past months, homeowners continue to use this particular form of home loan modification programming as a way to avoid foreclosure if a federal modification is unhelpful or simply as their primary choice for more affordability on their home loan. As this form of assistance continues to be offered by many major financial institutions, there are questions as to whether modifications in general are still helping prevent foreclosure or provide homeowners with the incentive to remain in their property even though home values have continued to decrease in some areas.
Yet, these alternative modifications, like other foreclosure prevention plans, are usually tailored to help homeowners who cannot meet their monthly payment obligation and not necessarily in place to address issues that homeowners may face who can afford to pay on their home loan despite having seen their property value decrease. Also, there are some homeowners who question the helpfulness of alternative modifications, and of the modification plans in general, but reports that were released earlier this month, and track data through March 2011, have said that over 76,000 home loan modifications through proprietary programs were made in the month of March alone, so homeowners who are facing trouble in the federal modification plan to do still have these affordability options available.
When it comes to acquiring an alternative modification, though, some banks may ask that homeowners apply for a federal modification first so that they can explore a variety of options before turning to these proprietary plans. However, homeowners with certain banks may be able to bypass federal modification plans and simply acquire more affordability through these in-house programs, yet it will depend on what mortgage servicer a homeowner works with as to the availability of these programs or what the application process may be.
It’s still being argued, though, that proprietary modifications can be more easily available to homeowners who are in a certain financial position where meeting their home loan is quite difficult, simply because federal modifications have servicers adhering to certain guidelines that must be applied to all homeowners who participate, while these in-house modification plans may be more flexible in their qualifications for homeowners or terms and conditions. Yet, they are no guarantees when it comes to foreclosure prevention, so homeowners may want to also speak with representatives from there mortgage servicer or housing counselors from the federal modification program before choosing what foreclosure prevention route to take.