Alternative Modifications See Continued Success Despite Decreases–Are These Options Still Helpful For Homeowners?

Homeowners who are looking for mortgage payment reductions and a plan that may help them find affordability on their home loan payment have often consulted not only federal home modification plans but proprietary, in-house initiatives that may be directly available from their servicer as well. Here in the month of August these options are still alive and well, but questions have arisen as to whether homeowners still have the opportunity to take advantage of these plans and to sustain these home loan payments, as there have been problems in the arena of modifications related to homeowners defaulting once again after a modification is made and facing foreclosure as a result.

Yet, according to data recently released, the month of June saw an increase in these proprietary home loan modifications to over 51,000, but this is a decrease from the prior month. However, these in-house home modifications still continue to outpace programs from the federal modification initiative, and this is where some homeowners are wondering whether they may have a better option at finding a modification solution to their predicament if they explore these alternative plans.

While modifications have been slowing in both federal and in-house modification efforts, homeowners are still not without these options as these ongoing programs may have not helped as high of a percentage of homeowners as they did in their early days, but they are still available to homeowners who may face foreclosure without some form of assistance to offer them relief during times in their personal lives where financial strains may be present. Homeowners should remember though, these plans are not guaranteed and there have been homeowners who have faced, at times, a higher rate of redefault on these in-house alternative modifications, meaning that more homeowners may be failing to find the sustainability they need.

The good news though is that the number of delinquencies being seen are reportedly down from last year, which is good news for homeowners who may have been in one of these programs for the long-term. Some homeowners have faced problems where the longer they are in their modification plan the higher the likelihood they may redefault, as factors like long-term unemployment or underemployment could make even these reduced payments difficult to meet.

Essentially though, homeowners who are granted either a private or federal home loan modification program could be in a position to avoid the loss of their home but careful debt management practices need to be implemented for homeowners who may have seen a reduction in their income as a result of factors like losing their job, seeing their spouse lose their job, or seeing a reduction in their wages. While banks may be able to offer both federal and private home loan modification plans, homeowners may need to consult financial officials, like credit counselors, to address issues that may lead to spending beyond their means to repay as mismanagement by homeowners in their personal financial life could also be a factor in falling into default once again and facing foreclosure.