Citigroup saw decreases in the number alternative modifications that were offered to homeowners who were denied federal assistance from the Making Home Affordable Program according to reports that were released by the Treasury Department in October and gave us information on these particular options that homeowners have after a modification denial between June and July. Yet, homeowners are still questioning whether there are alternative modification plans potentially available from servicers when decreases such as this have been seen, and there are some banks that do offer assistance through alternative modification plans, but these results are not necessarily tracked in this particular Treasury Department data surrounding the disposition path of homeowners after HAMP.
Yet, for homeowners whose trial modification was canceled, there was a decrease of almost 100 homeowners being tracked for this program total between June and July, in terms of alternative modifications offered, and for homeowners who were not accepted for a trial modification a decrease of 875 homeowners were reported between June and July as well. Homeowners should keep in mind that this does not mean alternative modifications were not necessarily made, as old loans may have been removed from a servicer’s portfolio between these two months where decreases were seen, but homeowners do need to know that alternative modifications will not necessarily be offered or easily accessible from certain financial institutions.
As always though, homeowners are urged to speak with representatives from their mortgage servicer and housing counselors so that they can potentially explore more options for foreclosure prevention that may go beyond simple modifications, as homeowners are not always in a position to benefit from a reduced payment on their mortgage, but may need help in other capacities. Numerous banks are offering aid to homeowners in a variety of ways as there are some homeowners who have been able to refinance for a more affordable rate and payment, who have opportunities that allow them to forgo making payments on their home loan for a set period time, but there are also state plans that may help homeowners by making mortgage payments for a set time when financial distress has arisen.
Alternative modifications have been seen in greater numbers by many homeowners who qualify for these proprietary plans but there’s also the issue of redefaulting after a modification from an alternative program has been offered, so homeowners do need to be aware of their financial situation and as to whether modifications will indeed be helpful. If it appears that a modification will be unhelpful, homeowners are urged to look in other areas of their financial life to see if costs may be cut in other ways so that a reduced payment would potentially lead to foreclosure prevention or, once again, look at these alternative plans that may address the cause of a homeowner’s financial payment distress rather than simply trying to pursue an unhelpful program.