There have been homeowners with Bank of America, among other servicers, who have pursued a federal home loan modification but were denied this type of mortgage assistance for one reason or another and, as a result, have turned to short sale or deed in lieu of foreclosure programs as a way to alleviate their financial burden. Obviously, many homeowners would rather find an affordable option to their mortgage payment troubles rather than participate in a short sale or surrender the deed to their home, but for some this has been an optimal choice since there can be relocation assistance funds associated with these particular plans in certain cases.
Also, there have been banks who have offered a substantial amount of financial compensation to homeowners who do participate in programs like short sales as this can aid a bank when it comes to avoiding having homes simply sitting empty in their inventory and causing distress in the housing market, which may come in the form of decreased property values. Obviously, if a lender and a homeowner work together in a short sale this can potentially fill the home faster, allow a distressed homeowner to relocate to a new living arrangement without having the burden on this mortgage following them, and again, allow banks to avoid excessive inventory, which at the present time is not being sold in numbers that have decreased the number of homes sitting empty in the housing market.
Yet, there was some positive results for Bank of America in this particular area as the number of homeowners who had there trial modification canceled but participated in a short sale or deed in lieu of foreclosure program as these numbers increased between April, when the total number of homeowners in this position stood at 14,021, to May where Bank of America had a total number of homeowners who had been offered one of these options at 14,283. Also, in cases where homeowners were not accepted for a trial modification, short sales and deed in lieu of foreclosure program totals for Bank of America increased over this two month period from 25,906 to 26,182.
Again, this information is only regarding homeowners who either had there trial modification canceled or who were not accepted, but a variety of homeowners who are in different financial positions have still been able to use short sale or deed in lieu of foreclosure options as a way to avoid a formal foreclosure on their home when financial distress has been a problem. While these programs are not perfect, it is one area of consideration that homeowners may be able to make when they are looking for ways to overcome financial troubles which may have led to an inability to make their mortgage payment and also have them in a position where certain foreclosure prevention opportunities are unavailable.