Help To Avoid Foreclosures After Federal Mortgage Assistance–Are More Options After A HAMP Denial Needed?

Treasury Department data has shown that homeowners who are unsuccessful at qualifying for the federal mortgage assistance program have seen increases the area of foreclosures, as some banks still are seeing increases in their starts and completions. However, there are also homeowners who may be able to avoid foreclosure by moving beyond these federal mortgage modification programs that are offered by HAMP, but this has not always been easy and may require a good deal of work on the part of homeowners who are fighting to keep their home out of foreclosure.

Homeowners who were not accepted into a trial program within the federal home loan assistance plan did see an increase in the foreclosure starts by over 12,000 and the number of total foreclosure completions increased between May and June by a little over 6,000. While the number of foreclosure starts for homeowners whose trial plan was canceled did decrease between May and June, the number of foreclosure completions during this time did rise by a little over 2,000.

The problem that some homeowners face is not knowing what opportunities are available to help them after they are denied one of these assistance programs from HAMP as some states may offer more opportunities than others, while certain servicers may address the needs of their homeowners in different ways, meaning they may address problems like unemployment or negative equity more closely than other banks. While it is worth exploring these alternative opportunities, homeowners are not always going to be guaranteed the opportunity to avoid foreclosure, but programs that are in place may offer payment reduction plans, forbearance opportunities, and there are still options to refinance a home loan even if negative equity is a problem.

What homeowners must remember is that despite the fact that foreclosures have increased over the past months, and continue to do so, this does not necessarily mean that because one route has been closed and there are no further options. Homeowners may have resigned themselves to foreclosure if a federal modification is not offered, but these payment plans are only one part of the overall loss mitigation efforts that banks are using, and even here in late September we still see some homeowners who are unaware of programs that may be available directly from their servicer or from their state that could potentially help them avoid the loss of their home by offering more affordability or payment assistance arrangements.

While each homeowner’s situation will be different, speaking with representatives from a servicer or housing counselors has been helpful to homeowners in the past, as we continue to see increases in free housing counseling assistance that have been made available to homeowners through resources like the Homeowner’s HOPE Hotline. Again, there are no sure things when it comes to avoiding foreclosure but since homeowners do have more options to avoid the loss of their home at the present time, it’s hoped that we will see decreases in the area of foreclosure starts and completions as these assistance plans continue to provide aid.