Homeowners who have been looking for assistance from HAMP are not always in a position where they have been able to avoid problems that have arisen and successfully take advantage of mortgage payment assistance, which have led some to file bankruptcy for a variety of reasons, particularly when a substantial amount of debt has become overwhelming. Yet, homeowners do still have foreclosure prevention and bankruptcy prevention assistance opportunities that can help them not only get a better grasp on their personal financial life but specific areas like their mortgage payment as well, but we have seen some increases in the area of bankruptcies in certain cases.
As an example, homeowners in the Home Affordable Modification Program who had their trial modification canceled saw an increase in the number of bankruptcies that were in progress, which was a cumulative total for major mortgage servicers between July and August, as this number increased by 89 homeowners. Yet, for homeowners who are not accepted for a trial modification within the federal program, these top 10 servicers totaled an increase of bankruptcies from 50,293 to 50,613.
The Treasury Department data which was released here in November may show that there are some increases being seen in the area of bankruptcies, but this does not mean that all homeowners are in a position where they must resign themselves to bankruptcy if mortgage payment assistance is not offered, nor are homeowners always in a position where foreclosures or foreclosure alternatives, like a short sale, will have to be used simply because a federal modification plan is unhelpful or unavailable. Homeowners do have options for alternative modifications, forbearance plans, or state payment programs that can help through dischargeable loans or payment assistance, but again this will vary from one homeowner and servicer to another.
Some homeowners feel that, when a great deal of debt is in place, there are few options outside of bankruptcy that can save their home, but this is often debatable as not every situation a homeowner faces can only be helped by a modification. Again, some homeowners are greatly benefiting from payment reduction plans, but there are alternatives that can be pursued by homeowner who is considering bankruptcy, despite the fact that they may not have been successful at acquiring a modification on their mortgage payment.
Again, homeowners are being urged to explore resources like housing counseling assistance to help those who are struggling financially, but when numerous debts are in place homeowners may benefit from simply talking with creditors outside of a mortgage servicer, or with financial professionals, in the hopes that affordable options may be made available on not only their home loan, but in other areas as well, so that these individuals can avoid extreme measures such as filing bankruptcy when their situation becomes difficult.