The month of June brought new results from the federal Making Home Affordable Program but there are some homeowners who are questioning whether a new rating system and even increases in the number of permanent modifications that are currently active translates to progress being made in the modification initiative overall. It’s no secret that numerous homeowners have had a very difficult time when it comes to acquiring a home loan modification, and for those who may be able to find a trial modification offer for their situation, further problems like delayed entry into a permanent home loan modification status or defaulting once again due to the inability of a homeowner to pay their modified payment have been issues which many feel may have held back the modification program for months.
The good news is that there have been increases in the number of active permanent modifications that have been seen from month to month and, according to the report released earlier this month, which tracked these numbers through the month of April, it was stated that active permanent modifications were up to over 608,000. While this is still much lower than many officials would like to see, and the overall number of homeowners which are reportedly supposed to have been helped is unlikely to be reached, there are still issues that homeowners find when they are dealing with their servicer, even though there are increases in areas like these permanent modification offers.
However, a new rating system has put some of the top financial institutions working within the federal Making Home Affordable Program into a category where they need substantial improvement or incentives may be denied to them. In the past, banks that were participating in these programs were given these incentives for allowing homeowners to participate in the modification plan, which was hoped to reduce the overall number of foreclosures that these homeowners would see, but due to the failings on the part of certain servicers, many homeowners grew quite frustrated and felt that HAMP was by and large a failure.
While there were some homeowners who did cause some of their problems in terms of dealing with their servicer, the banks that were deemed to be in need of substantial improvement by the Treasury Department were Bank of America, Chase, Ocwen Loan Servicing, and Wells Fargo, and even though there is a potential that incentives may be withheld from some these servicers, there are opportunities for improvements to be made before any action is taken.
There are homeowners who still questioned whether this rating system will prompt changes in the modification effort as there are still issues that homeowners face when pursuing this type of foreclosure prevention, but the rating system is reviewing not only each servicer’s performance overall but they are breaking down where errors have occurred, like the calculation of a homeowner’s income and the transition percentage that homeowners are seeing from trial modifications to permanent modification plans. While there are still complaints from homeowners, it’s hoped that this review process will bring to light changes that can be made and potentially offer more success in the coming months of 2011.