The Treasury Department released reports here in early October regarding the most recent information we have on the federal Making Home Affordable program, and it was reported that Bank of America saw an increase in the number of permanent modifications that are currently active within HAMP, which may point to continued success that has been seen by some homeowners and potential programs that may prevent foreclosures in this area. Obviously, not all homeowners have been in a position where modifications were beneficial, but this particular aspect of the overall foreclosure prevention opportunities that homeowners have with Bank of America has continued to see success despite criticism and complaints.
While there have been numerous mortgage servicers who have seen improvements in various areas of their homeowner assistance programs, these current Bank of America permanent modification plans increased between July and August from 132,763 to 136,195. Yet, where homeowners have often found trouble with not just Bank of America but the modification program in general usually centers around issues related to acquiring a trial modification or continuing their mortgage payments with a modified payment plan in place.
Problems that have arisen in this area have usually come about with homeowners being unable to pay their mortgage even when these modified payment plans are offered, as some forms of financial distress related to unemployment have caused homeowners to simply fall behind on even a reduced payment but there are some who have had problems related to the overall amount of debt in their lives, and as a result were not able to benefit from these modification plans and may have had to either look into other opportunities for foreclosure prevention or reapply for the Making Home Affordable Program.
Homeowners are being cautioned against relying too heavily on modification programs as these initiatives from major servicers like Bank of America have been able to keep some from foreclosure but if homeowners have other areas of financial distress in their lives even meeting these reduced payments could be difficult and, when debts get out of control even further, it could create a problem where personal debts outside of a mortgage are no longer able to be paid and homeowners either do damage to their credit score by missed payments on certain unsecured debts, like loans and credit cards, or homeowners have simply spread themselves too thin and missed mortgage payments.
While Bank of America homeowners are also in a position where they may currently take advantage of programs beyond this federal mortgage payment assistance program, HAMP may be a first step for some but they should be remembered that when homeowners address payment issues quickly after financial emergencies arise and also consult housing counselors or representatives that may be in charge of state housing programs, the likelihood that an optimal fit to a homeowner’s mortgage payment assistance needs may increase and problems like redefaults may be avoided in the long run.