Homeowners who are seeking out a home loan modification may have options through private home loan modification plans as services like J.P. Morgan Chase have been able to offer these alternatives to homeowners who cannot find the affordability they need from the federal home loan modification program, but may still be in a position to benefit from this particular type of loss mitigation. Understandably, modifications from Chase and their private efforts may potentially differ than alternative modification programs made directly from other financial institutions, but there are some who argue that this can be a positive for homeowners.
Essentially, homeowners who work with their mortgage servicer to find a solution for their mortgage payment problems could end up benefiting from a private modification as a financial institution making this plan will not have to adhere to federal guidelines necessarily when it comes to offering lower payments on a home loan. Yet, homeowners with Chase are not guaranteed this type of assistance as there are some hurdles which may have to be overcome by homeowners who are seeking either a federal home loan modification or private modification plan.
However, in the July Treasury Department HAMP report, J.P. Morgan Chase did see in increase in the number of private modifications they made from April to May of 2011 as these modifications increased from 38,574 to 39,080. These plans, once again, may be similar in some ways to the federal modification program but are also able to help tailor an individual plan to meet a homeowner’s needs in some cases, as term extensions, rate reductions, or other methods can be used by a particular servicer to help a homeowner in need. As an example, some homeowners may not qualify for a federal modification plan due to factors like their mortgage payment is less than 31% of their household income, but in situations where a modification may still be needed, this is where a private plan can be helpful.
Homeowners need to understand that there are some individuals who have been offered these private modification plans but have defaulted once again, as these programs are not guaranteed to the homeowners,and there are also problems that may arise in terms of affordability, so homeowners will want to make sure that they explore all options that may be available to them. Homeowners with J.P. Morgan Chase or other financials institutions can still contact their servicer or a housing counselor from the Homeowners HOPE Hotline, which reportedly have helped over 1 million homeowners to date. Keep in mind though, these private modifications do still have problems and homeowners may want to address their mortgage payment difficulties as soon as they arise so that all of these opportunities may be carefully explored and homeowners find the best foreclosure prevention plan for them.