Bank of America saw an increase in the number of foreclosures that were tracked earlier this year, according to reports that were released in the first part of June from the Treasury Department, and many are questioning how these foreclosures will continue to impact homeowners as the effects of foreclosures on the housing market are causing a great deal of distress to property values and, as a result, servicers are having to take further actions to fill these homes. Bank of America is one of the largest financial institutions that has been working with the Making Home Affordable Program, but despite efforts not only from the federal initiative to prevent foreclosure, but in-house modification programs as well, many of these large banks continue to see homeowners facing the loss of their home.
One small section of foreclosure data does come from the federal modification program, in the form of homeowners who were not accepted for a trial modification or who had their trial modification canceled, and for Bank of America these areas did see an increase in the number of foreclosure starts and completions. The most previous reports follow these homeowners in February and March of this year, and for Bank of America homeowners who had there from modifications canceled, there was an increase in total foreclosure starts to 31,844 and foreclosure completions rose to over 7000. Also, homeowners who were not accepted for a trial modification saw the number of total foreclosure starts increase to a total of 54,897 with foreclosure completions sitting at over 19,000.
How this data impact homeowners is one question that many have raised, due to the fact that more banks are beginning to work with homeowners in the form of short sales if foreclosure is inevitable, but there are many of these major banks, like Bank of America, who are also participating in plans directly from state housing agencies and initiatives like the Hardest Hit Fund. Unemployment, which has been a major drag not only in the personal lives of homeowners but the housing market as well is one aspect of financial distress that some modifications have been unable to help with because a homeowner who is only living off of unemployment benefits or have seen their wages drastically reduced still may not be in a position to afford modification payments.
If opportunities through programs like the HHF, which offers unemployment assistance to homeowners in certain states, happens to be unavailable or unhelpful for a homeowner, there are programs like the short sale initiative that is built into the Home Affordable Foreclosure Alternatives program and there are indications that some banks are not only helping homeowners in terms of contacting them so that they can explore this option early, but some may be speaking with realtors to, hopefully, fill these houses much faster.
Homeowners are never guaranteed the opportunity to avoid foreclosure, but with these new initiatives in place and programs that will hopefully become more widely available in a number of states, it’s hoped that with banks working to fill homes in cases where foreclosures are inevitable and more foreclosure prevention options being made available to unemployed homeowners, the housing market may begin to see fewer homes sitting empty and, as the economy improves, property values will increase and homeownership will become less difficult for many who are still seeing the setbacks from the recession.