The federal mortgage modification program was hoped to help over 1 million homeowners, with some estimations being around 2 or 3 million homeowners, but reports released here in November, which track data through September of 2011, indicated that there were only 720,612 permanent modifications that were currently active, which is obviously far fewer modifications than many officials had hoped we would see by this time at the program’s inception. However, we have seen that private mortgage assistance plans are outpacing the federal modification program, but there are some concerns that private modifications, while they may be greater in number, are not necessarily helping a substantial amount of homeowners in terms of lasting mortgage assistance.
Data that was recently released indicates that there were over 4 million private home loan modifications that have been offered to homeowners since 2007 but, there is some concern as we have seen problems related to homeowners falling into default once again even after these proprietary modifications are offered. The Hope Now organization states that 80% of homeowners who have received proprietary modifications, after six months, are still performing well and there has been a decline in delinquencies from 2010, but there are still millions of homeowners who are delinquent on these proprietary plans as well.
However, this is where arguments have both risen in favor of proprietary modifications and against these plans as, once again, from the third quarter of 2010 to the third quarter of this year there have been some improvements in areas such as delinquency, foreclosure starts, and even sales that were reported, but this does not mean that homeowners are going to be guaranteed any type of success with a proprietary modification versus a federal home loan modification plan. In fact, there are still instances where homeowners are falling behind on their modified mortgage payment no matter what type of home loan modification assistance is offered, as both federal and private modification programs have seen their problems.
Yet, the homeowners who are in a position where a modification may help, as lower payments on home loans will obviously go a long way for many, homeowners are still being urged to make sure that they speak with their mortgage servicer to inquire about what opportunities may be available, as not all financial institutions charged with servicing these mortgages are going to offer the same types of mortgage assistance plans. Furthermore, homeowners may benefit from various types of counseling assistance as housing counseling agencies may be able to help homeowners explore opportunities available to them, understand what will be required of them, and there are also some homeowners who are looking at counseling for financial areas outside of their mortgage as credit card debt or other personal obligations could hinder homeowners from meeting even a modified home loan mortgage payment and, as a result, may be one reason that continued financial distress is in place in the lives of some of these homeowners.