Homeowners who have been granted a permanent home loan modification have not always been out of the woods when it comes to avoiding foreclosure as problems like homeowners falling into delinquency even after receiving a modification agreement have plagued not only federal modification plans but private home loan modification programs as well. Yet, according to Treasury Department reports, homeowners in the first quarter of 2011 were not only seeing better results, in terms of the percentage who were late on their payments after receiving a permanent modification, but they did also improve from the first quarter of 2010.
As an example, homeowners who were granted a modification in the first quarter of 2011 numbered at 71,882. Of this number of homeowners, 2.6% were 60 days late on their mortgage and .8% were 90 days delinquent on their home loan payment as of May. While these percentages in the first quarter of 2011 did drop from previous quarters in 2010, they were also down from the first quarter of 2010 as well, but homeowners are still finding even payments within a permanent home loan modification program difficult to meet.
While there are some positive signs in these reports, homeowners may have to seek out alternative options to help them avoid the loss of their home if a permanent modification simply does not help their situation. Obviously, if a homeowner has missed two or three consecutive monthly payments despite having their home loan payment modified, this could point to either problems within a modification agreement or financial distresses are so severe within the life of a homeowner that a simple modification will not do.
Obviously there are problems like health issues that homeowners may face or further financial setbacks that take place, like unemployment or a reduction in a homeowner’s wages even after they may have experienced financial distress which led them to pursue a modification, but some homeowners may also have factors like a second lien on their mortgage which could be causing payment problems to arise and defaults to occur once again.
Homeowners do need to remember that despite the fact there are problems related to homeowners falling into delinquency, some are finding success in alternative home loan modification plans made directly from their servicer. While many of the major banks that are participating in HAMP can offer this assistance plan to a homeowner, there have been issues within these programs as well that have led to homeowners defaulting even after being offered this particular type of modification agreement as well. This can be frustrating for homeowners because a proprietary modification is supposed to be, ideally, more beneficial for a homeowner in need as a servicer does not necessarily have to adhere to federal guidelines when it comes to working out an agreement with the homeowner and, in theory, should be able to aid homeowners in a more specific way that will meet their particular needs.
Yet, homeowners can also look at options from state housing agencies as programs within the Hardest Hit Fund are still available to assist homeowners in a variety of capacities to help them address certain issues like negative equity, unemployment, or delinquency on their mortgage. Homeowners will have to make sure they do plenty of homework by consulting with their servicer, state housing agency, or a housing counselor that is approved by the Making Home Affordable Program or resources like the FHA, but when it comes to alternatives that may be available for those who have become delinquent after a permanent home loan modification, homeowners should be aware that there are potential foreclosure prevention options still out there.