For Bank of America homeowners seeking an alternative modification, reports that were released in the early part of May and tracked data through the month of March for the Home Affordable Modification Program showed that there were increases in the number of homeowners who received an alternative modification when a traditional home loan modification plan was denied through HAMP. Many homeowners are still looking for ways to make their mortgage payment more affordable and, despite the fact that the federal modification program has received negative reviews since its inception, many homeowners still turn to this program initially in the hopes of finding a lower payment. There have been troubles for some homeowners, but there are still success stories that have come out of HAMP, yet many homeowners are still finding that they do not meet the qualifications that are required for this form of foreclosure prevention and often turn to alternative plans as a result.
When it comes to an alternative modification though, some servicers have seen mixed results or relatively little increases in the number of plans that are being made. However, according to the March report for Bank of America, homeowners who were not accepted for a trial modification but are in the process or have been granted and alternative modification numbered over 79,000 and for those whose trial modifications were canceled, the total increased to over 77,000.
Homeowners with Bank of America, or any servicer, do need to realize that not all will be able to qualify for these programs, and even for some who have, there are still issues that have arise. There have been instances where homeowners have been unable to qualify for a permanent home loan modification from HAMP simply because they do not meet requirements like the ability to make payments on their modified mortgage for up to three months. In some cases, homeowners have been held in a trial modification for much longer than this trial period, but some individuals are able to transition into a permanent modification more easily. While homeowners will differ in how they are able to handle these altered payments, some have simply been in a position where they say the modification payments are too costly and, as a result, there have been problems for homeowners defaulting once again despite having a reduced payment.
Yet, it was thought that when Bank of America and other financial institutions implemented these programs, which allowed them to make in-house home loan modifications available, more might see success, and there have been larger numbers of homeowners seeing offers from alternative modifications and receiving alternative, proprietary home loan modification aid. There are, though, those homeowners who have stated even these proprietary modifications are too expensive and, there are default rates coming out of these in-house modification plans as well.
For homeowners with Bank of America particularly, these increases that were seen in the most recent report from HAMP could prove to be a positive sign, particularly if homeowners are still struggling to make the federal modification plan work for their situation. Keep in mind though, homeowners must stay in contact with their servicer, inquire about assistance early before financial distress becomes unhelpful, and in some cases simply consulting a housing counselor made available to homeowners through HOPE NOW and HUD may offer more guidance so that either a traditional or alternative modification will be more easily acquired or homeowners can put themselves in a position to afford these plans.