Recent reports from the Treasury Department released here in early October have shown that, through the month of August, J.P Morgan Chase has seen some improvements in the number of trial modifications that are currently active within the Making Home Affordable Program efforts that have extended this particular form of assistance to homeowners in need. We have seen some ups and downs in the area of active trial modifications for many servicers but there are still increases being seen and permanent modifications made, despite the fact that some homeowners may still be having trouble in terms of getting help from a trial modification or transitioning out of a trial program.
Yet, increases like these seen by J.P. Morgan Chase may be a positive sign for some homeowners who are in a position where they may have to pursue a modification as more increases in active trial modifications and active permanent modifications could suggest that homeowners are seeing more success in terms of making their way through these HAMP assistance plans. Again, not every servicer has seen increases in this area of trial modifications but Chase reportedly had 19,742 active trial modifications in July but this number increased to 24,530 in August.
However, Treasury Department data has also shown that for J.P. Morgan Chase trials that were started after June 1, 2010, there has been a 69% conversion rate on these home loans, in terms of those go from a trial to a permanent modification, but homeowners with Chase are seeing more positive results in terms of the number of months homeowners are kept in these trials as the length of a trial modification upon the time of conversion is around 4.6 months for Chase, which has dropped substantially from over eight months which was the case for some homeowners whose trial modification was started before June of last year.
When it comes to the successful use of a trial modification though, homeowners must make sure they are in a position to benefit from a reduced mortgage payment as some are simply not finding the sustainability they had hoped would arise from a modified mortgage payment. Furthermore, homeowners do have options beyond a federal modification program if certain factors like a second mortgage may be hindering their ability to pay even a modified home loan payment, so some homeowners may have to look into these extension programs in order to fully implement all of the foreclosure prevention aid they need.
Homeowners may also contact resources to help them get their financial life in order in other areas as homeowners are still seeing debts related to personal loans and credit cards, just to name a few, that may hinder them from benefiting from reduced payments in these modifications plans, and if homeowners do miss payments during a trial modification period it could create further setbacks and put them in danger of facing foreclosure once again.