Bank of America’s participation in the Home Affordable Foreclosure Alternatives Program continues to offer assistance to homeowners through short sale or deed in lieu of foreclosure plans as there are still many individuals who are looking into these types of options when it comes to getting out of their home loan requirement when negative equity or payment problems have arisen. When it comes to these opportunities and homeowners have to sell their home loss or surrender the deed to their home, many banks have been attempting to make this transition easier as a homeowners who are in a position where they either owe much more on their home than it’s actually worth or can no longer pay their mortgage after pursuing foreclosure prevention plans may be able to help transition new homeowners into the property, specifically through options like short sales, which can have benefits for both banks and homeowners.
Furthermore, there have been some servicers who have focused on these areas as foreclosure alternatives have provided a great deal of help for homeowners struggling in their mortgage, but again, when banks are able to help homeowners transition from their property through these programs relocation funds may also be offered to homeowners, which has been helpful as well. Indeed there are some banks that are seeing increases in these particular programs as Bank of America specifically saw an increase in the number of agreements started and completed within the HAFA program between July and August according to Treasury Department reports.
This data that we have, which was released here in October, shows that Bank of America saw an increase in the HAFA agreements that were started, which rose from 2,824 in July to 2,929 in August, but there were also an increase in the number of agreements completed as Bank of America saw an increase from 1,873 and July to 1,978 in August. However, homeowners are still being urged to explore foreclosure prevention well before considering these foreclosure alternatives as programs like short sales or deed in lieu of foreclosure options may have an adverse impact on a homeowner’s credit score for one reason or another.
In some cases, homeowners have seen these foreclosure alternatives to be viewed in a similar fashion as a debt settlement, which means they can lower a homeowner’s credit score, but some homeowners may have financial distress in their lives that is so severe that by the time they pursue one of these short sales or deed in lieu of foreclosure plans that they have already missed payments in other areas, become delinquent on their mortgage, or may be in a much worse financial position in terms of honoring their debt obligations, which will obviously also do damage to their credit rating.
Essentially, what advisers are urging homeowners to do is to make sure they address their financial problems early, as Bank of America specifically has a multitude of foreclosure prevention plans that may be offered directly from the federal modification program, in-house initiatives or they also participate in some state housing agency plans like the Hardest Hit Fund, so homeowners who look into these options early, seek out more affordable payments or even forbearance options, and potentially find a solution to their mortgage payment needs might be able to avoid financial setbacks and the loss of their home even if it is through one of these foreclosure alternatives.