Reports that have come from earlier in the year bringing state alternative home loan modification plans that homeowners may be able to use for lower monthly mortgage payments have seen slower progress in some cases, which has also been a theme that federal home loan modifications have had as of late. In fact, there were indications that in the month of May there were decreases in the number of home loan modification alternative plans that had been given to homeowners than in April, but homeowners do need to know that there are still alternative modification options available. Yet, homeowners are still seeking these plans simply because they offer similar benefits of federal modifications like reductions in principal payments or even forgiveness options in some cases, and reductions in interest rates as well.
However, homeowners are still seeing problems that have arisen in the area of alternative modifications when it comes to their ability to either acquire these plans or sustain the payments that they are offered. While the problems that homeowners face are usually a result of their particular situation, meaning some homeowners may be offered similar modification agreements but will obviously have different end results in terms of their ability to afford these payments on a monthly basis or to simply take advantage of these programs for the long-term.
Many homeowners have continued to question whether modifications, be they alternative modifications or federal modifications, are helpful for homeowners who are struggling to make ends meet but it is a case where there have been positive results as seen from these programs and many servicers are working with homeowners to modify their mortgage to an extent where they can keep their home. Since there are relatively few homebuyers in the housing market right now many banks are seeing that with continued foreclosures they are simply adding to a backlog of homes that few buyers will fill at the current time.
What these alternative modifications do bring that a federal modification may not is the fact that they can be more specifically tailored to a homeowner’s certain situation and there are some financial institutions that are trying different modification options, which may come with principal reductions for homeowners who are in a negative equity situation. However, homeowners must make contact with their servicer to inquire about these alternative plans as the availability, aspects of these programs, and the overall helpfulness that a homeowner may gain from an alternative modification plan will depend on what their servicer has to offer.
If homeowners have talked with housing counselors they may have been informed that these proprietary modification payments could potentially be an option, but homeowners need to remember that there are no guarantees in the area of foreclosure prevention despite the fact that there are numerous programs currently in place. Homeowners are often advised to take action as soon as financial problems arise or if they have explored federal modification options and been denied since they may need to talk with their servicer or a reputable counselor immediately so that they can begin exploring these alternative modification options or other areas of foreclosure assistance that may be helpful for their needs.