In the early parts of August we saw information released regarding Citigroup home loan modification plans currently available to homeowners and this data given by the Treasury Department may help some homeowners who are currently looking for a trial modification from this particular servicer as a way to find more affordable payments on their home loan and avoid foreclosure. Yet, many servicers have seen the number of permanent modifications increase, but there are decreases being seen in the area of active trial modifications that homeowners are being offered or are currently using as a means to acquire one of these permanent modification plans.
This new information released here in August tracks the participation of Citigroup through the month of June, which gives us information that may be the result of certain changes that were enacted within the federal home loan modification plan by servicers after they were given ratings on their performance months ago by the Treasury Department. However, some homeowners do still struggle in the area of trial modifications and according to these reports, Citigroup saw a decrease in the number of active trial modifications that were reported between May and June from 5705 to 5227. Also, Citigroup saw an increase in the number of active modifications that had lasted six months or longer, which has been a problem for other servicers as well when homeowners may have been unable to move from a trial to the permanent home loan modification phase.
The problem that some homeowners have in this area of trial modifications is not strictly confined to Citigroup, as homeowners across the board have had difficulties when it comes to keeping their home loan modification payment current during this trial phase and there are some homeowners who have reported they are simply not moved to a permanent modification after the three month trial period has concluded, which is one area where servicers are being asked to up their efforts as some of these failures to transition a homeowner from one part of the modification program to another simply stems from these servicers allowing trial modifications to become backed up.
Homeowners still facing trouble related to long-term unemployment are mainly those who may be in need of assistance despite the fact that other areas of a homeowner’s life could impact their need for financial assistance on their mortgage payment. Unemployment has remained above 9% as of late, but also some issues like medical problems have arisen for homeowners that have necessitated the need to explore these modification plans, but homeowners have also simply spent beyond their means to repay in terms of their mortgage payment.
While the issues at hand are different from one homeowner to another, these trial modifications from servicers like Citigroup do still offer opportunities for homeowners to find more affordability on their mortgage payment, but homeowners do need to understand that they may have to explore alternatives like private home loan modifications directly from their servicer or, if a homeowner’s situation is too far gone to help, alternatives like short sales or deed in lieu of foreclosure plans may need to be explored as well. Homeowners can talk to representatives from their servicer or officials to help them explore these specific options available for their situation since homeowners need to be as educated as they can before they make a decision as to how they will address their mortgage payment problems.