Home Loan Modification Trial Plans That Are Cancelled Or Denied–Have Homeowners Become Current On Their Payments?

The goal of any homeowner who is pursuing a federal home loan modification is to qualify for a trial plan, since making successful trial payments can lead to a permanent modification, which in some cases, has helped homeowners avoid the loss of their home due to foreclosure, but there are homeowners who have had trouble in not only getting a trial modification but sustaining a trial plan also.  Yet there is information that, within HAMP, there are homeowners who are facing cancellation of their trial but are finding themselves to be current on their home loan payments.

However, there is Treasury data that tracks what happens to homeowners, with the top servicers within the program, after they have either had their trial plan canceled or initially denied, but the good news is there have been increases in the number of borrowers who are said to be current over the life of the program. Data released in this particular section of the modification report is a compilation of information from months earlier this year, as the last two reports gave us information from March and February.

What many feel may be good news though, the total number of borrowers who were said to be current as of the last Treasury Department report increased from 52,812 in February to 58,090 in March for homeowners whose trial modification was canceled, and for homeowners who were not accepted for a trial modification, the number of borrowers who are current increased from 286,281 to 325,734. Obviously, there are some officials who do not interpret this data to necessarily be a positive sign that things are looking up in terms of homeowners who can no longer afford to pay their mortgage, as foreclosures are still a problem across the nation.

Yet, with this data coming from earlier in the year, it’s hoped that reports that are due out in a few weeks will show more positive results in this area, but again these numbers do not represent the totality of homeowners in the housing market who are having problems, and in some cases foreclosure completions also increased, meaning that more homeowners did lose their home as well.

For homeowners who are still looking for foreclosure prevention assistance through the federal modification initiative, there are new aspects of the program in place that will hopefully spur more lenders to revamp aid deficiencies they may have in their loss mitigation efforts, as there are not only federal modifications available to homeowners, but a wide variety of other programs with different agencies as well. There have been indications that banks have in fact been working to implement more efficient modification practices, but homeowners do need to be prepared for a potentially difficult process when it comes to applying for a modification, making payments within a trial modification plan, and ultimately moving towards a permanent home loan modification payment.