A great deal of information has recently been released concerning the federal home loan modification program, and specifically related to permanent home loan modifications, there is good news for homeowners as an increase was seen according to reports released here in the early part of June, which tracks data through April 2011. However, there are also some indications that aspects of the Treasury Department reports have led to servicer’s facing low ratings and, in some cases, funding may be denied to major financial institutions as a result of their failure to comply with certain HAMP standards.
While we hope to bring more information on not only the modification program and changes mentioned in these reports in the coming days and weeks, we want the focus today on the increase in the number of permanent home loan modifications that have been seen, as this is ultimately the goal that homeowners are striving toward in their foreclosure prevention efforts. The issue of these major financial institutions who may have their fees withheld has obviously been a hot topic since yesterday, but there are some indications that if changes are made, this potential denial of funds could be reversed and these banks will be given the incentives that have traditionally gone to financial institutions that make these modifications.
Yet, the reason that these new performance reviews and modifications are what homeowners are focusing on at the present time is because this could lead to more beneficial results in the program overall, if mortgage servicers are being held to an even higher standard. While the most recent report, which tracks data through April, stated that there were 608,615 active permanent home loan modifications as of this latest report, which was an increase from the previous month which only had 586,916 active permanent modifications reported, there are hopes that homeowners who have had a frustrating trial or have had problems when dealing with their mortgage servicer will begin to be corrected thanks to more information being made available about individual banks.
There have already been some banks who have contested this denial of their fees for participating in HAMP as there are some issues which are outside of a bank’s control and, as a result, some of the aspects that go into these performance reviews may have led to a bit of a lower score for certain financial institutions and their particular Making Home Affordable Program efforts. As an example, many homeowners grow frustrated when they are not given a modification that is significantly lower than their mortgage payment, but this may be a situation where certain aspects of the program and guidelines are to blame, but no matter what the source of a homeowner’s problem happens to be, corrections must be made. Again, it’s hoped that even if program deficiencies or servicer error is to blame in a variety of cases, new reviews conducted by the Treasury Department and HAMP will lead to not only a more positive experience for homeowners seeking foreclosure prevention assistance but continued increases in these permanent modifications will be seen as well.