Homeowners looking for a Bank of America short sale option or other foreclosure alternative programs like a deed in lieu of a foreclosure opportunity may have seen that, according to reports released earlier this month, the number of short sales and deed in lieu of foreclosure plans that were tracked within the HAMP initiative increased for Bank of America homeowners, which is a sign that these opportunities may be still helpful for certain individuals facing negative equity, unemployment, or other financial stress that has led to their inability to pay their mortgage. Yet, homeowners are still being prompted to consider options outside of a short sale or deed in lieu of foreclosure, strictly for the purposes of saving themselves from difficulty related to a reduction in their credit score.
For some, though, credit damage that may be done to their current rating is not the issue, but avoiding foreclosure is what numerous consumers have on their mind when they began pursuing a short sale opportunity or deed in lieu of foreclosure. Yet, consumers have been made aware over the past months that a short sale, as an example, can have as much negative impact on their credit score as a foreclosure, but many feel that some lenders may view this to be more positive in the future if a homeowner attempts to reenter the housing market.
While it was reported weeks ago that a consumer’s FICO score could see a decrease of comparable amounts no matter if they sell their home at a loss through a foreclosure alternatives program or simply a allow foreclosure to take place, but more Bank of America homeowners have taken advantage of these opportunities as the number of homeowners who were not accepted for a trial modification grew to over 31,000 according to reports released in early May that tracked data from the month of March. Also, Bank of America homeowners increased in number to over 23,000 who are currently or have been participating in a short sale or deed in lieu of foreclosure plan after having their trial modification canceled.
Some homeowners are finding that if they are willing to work with their servicer when they cannot meet their home loan payment and participate in one of these programs, even though they are seeing a decrease in their credit score, many are optimistic about the future and their opportunities to reenter the housing market as there are some financial institutions who still view homeowners as a relatively safe credit risk no matter whether they have lost their home to a short sale or deed in lieu of foreclosure program, as a result of financial problems related to factors like negative equity or unemployment. Homeowners must remember, though, that there are options outside of these alternatives that can be beneficial in keeping homeowners from the loss of their home entirely, so these opportunities should be explored first before a HAFA plan or proprietary short sale is considered.