Wells Fargo homeowners seeking a trial home loan modification plan may be pleased to know that there have been increases in the number of active trial modifications that have been made, as are the most recent report released here in October that has tracked data from the Treasury Department through the month of August. Many servicers have seen decreases in the number of the number of active trial modifications that have been made, which has led some to question whether there were still opportunities to acquire a trial modification and subsequently proceed into a permanent modification, if federal HAMP qualifications were met.
Yet, all major mortgage servicers who are using this particular federal program to help homeowners do still offer these active modifications, but we have seen varied results over the past months in terms of how many plans are active in the trial modification category. However, Wells Fargo did see an increase in the number of active trial modifications between July and August as this number increased from 11,487 to 12,574. There was one area of trial modifications that did not improve, as Wells Fargo saw an increase in the number of trial modifications that had lasted six months or longer as 1,265 were reported in July while 1,550 were reported in August.
These increases in trial modifications that last six months or longer obviously show that homeowners are being stuck in a trial modification period for much longer than the 3 to 6 month average, but as to why homeowners are failing to transition to a permanent modification is usually found as a result of either homeowners being unable to make the mortgage payment within this modified agreement or some servicers have simply had a backlog of modifications that they have not been able to transition into a permanent plan as of yet. However, we are still seeing improvements in the federal modification plan despite the fact that it does still draw criticism and there are some servicers who are being singled out as in need of improvement by either a moderate or substantial degree.
Homeowners are not always finding themselves in a pleasant situation when pursuing one of these modifications, and there have been numerous complaints waged against every servicer who has been charged with implementing these programs to homeowners as part of the HAMP initiative, but modifications do still help homeowners avoid foreclosure in some cases and arguments are being made by the Treasury Department that this program has been helpful despite the fact that many feel it to be lackluster.
In the end though, homeowners are being urged to seek out aid from housing counselors if they are having trouble with the modification program and also address financial problems early, through either personal action or with the help of a credit counselor, so that they may be able to either find solutions in terms of their mortgage payment problems or if a modification is required they may not only have the help to get through the application process but will be in a financial position to benefit from these modified payment arrangements.