As foreclosures still remain a problem for many homeowners here in June, there are programs and changes to the practices that some banks may have in place currently that may not be helpful to all homeowners who are attempting to avoid the loss of their home. Homeowners who are seeking home loan payment assistance or reductions in their overall home loan costs are in a position where these changes may soon bring about more options when it comes to helping men and women explore the opportunities available to help with their goal of avoiding missed payments or finding alternative routes that will help them keep their home.
Rates on home loans are still quite low at the present time and this has led to the opportunity for some homeowners to refinance their mortgage to either a lower rate or a shorter mortgage term and rate, which can save them in the long run or on minimum payments. Last year when mortgage rates were at record lows, many homeowners were able to either refinance and find lower monthly payments or get out of debt faster and at lower overall costs by refinancing to a shorter mortgage term. Yet, homeowners are still in a position where this is not an option thanks to either negative equity or other financial problems that may prevent them from affording the costs that come with refinancing.
Typically, home loan modifications have been the route that homeowners choose when home loan refinancing for more affordability is not available for their particular financial situation, and thanks to changes that are hoped to begin here in the middle of June and continue into the summer, homeowners may find more streamlined practices in this particular area of foreclosure prevention.
As an example, for mortgage servicers who have not already implemented a single point of contact rule will be required to do so in the coming weeks, in the hopes of cutting down on any problems of communication that homeowners have with their servicer during the home loan modification process. Also, there are new rating systems that have recently been released in the most current Making Home Affordable servicer reports, and it’s hoped that homeowners who are with servicers that may have received a low rating will see changes that come from these calls for improvement by the Treasury Department and, in the future, more modifications and foreclosure prevention efforts may be made available.
While refinancing and modifying a home loan are two of the more common ways that homeowners have gained more affordability on their home loan payment and avoided missing mortgage payment obligations or defaulting, they are not always an option for every homeowner, so homeowners who are in a position where financial problems may be present must explore not only these options early but give themselves time to look at other foreclosure prevention routes that may be available directly from their bank or from sources like their state housing agency.