Wells Fargo’s participation in the Foreclosure Alternatives program, an extension of HAMP, has seen improvements between June and July according to the most recent Treasury Department reports and this could indicate that further opportunities that are currently available here in September to homeowners who feel that HAFA is going to be the best course of action for their home loan predicament. In many cases, homeowners who are underwater on their mortgage or simply do not qualify for foreclosure prevention assistance through a payment reduction plan have been able to use this program as a way to transition from their home without facing a formal foreclosure, and in some instances it has actually been requested by homeowners.
Yet, many of the banks using this option to help homeowners did see increases as well, but specifically for Wells Fargo the number of Home Affordable Foreclosure Alternatives agreements started between June and July increased from 6,229 to 7,002 and the agreements completed increased from 3,123 to 3,609. What this means for homeowners is that there are still efforts being made in this area, but this route is not necessarily always open or best for a homeowner’s situation.
Obviously, the state of a homeowner’s financial life and their ability to pay their mortgage will differ but homeowners who may see a decrease in their credit score if they participate in one of these programs, despite the fact that short sales have been quite popular among homeowners in a negative equity situation. However, there are arguments being made that some homeowners who get to the point where a short sale or deed in lieu of foreclosure plan may be optimal will have likely seen financial setbacks to the point where their credit score has already taken a hit and, if homeowners work with their servicer, they may be able to get out of a difficult mortgage situation more easily.
However, homeowners need to make sure they fully understand what a short sale agreement or a deed in lieu of foreclosure program entails for their personal situation, and if a homeowner is using this opportunity to escape financial setbacks through further missed payments, homeowners should be sure that their servicer will not pursue them for any difference in the amount they owe and the amount a home is sold for, as this problem has arisen for some in the past. Yet, the Home Affordable Foreclosure Alternatives program was put in place so that homeowners will be able to escape not only mortgage payment difficulties but the problem of their servicer pursuing them as well, and being informed about what these programs will require of a homeowner will obviously be a major priority when looking into how Wells Fargo homeowners, or any homeowner for that matter, could benefit from these foreclosure alternative options.