Alternative Modifications Program may Help Reduce Foreclosures
Lender firms are under fire from all corners due to several foreclosure related issues. Banks have been working round the clock to satisfy their customers, deal with congressional hearings, revamp overall procedures and come up with new strategies to deal with existing issues and tackle future ones. One such initiative that has surfaced is that lender firms are trying their best to offer alternative modifications to their customers. Alternative modifications are in-house initiatives taken by the lenders themselves.
The Home Affordable Modification Program has been accused of underperformance and has been unsuccessful in many cases. Under the HAMP, the number of cases that are rejected or cancelled is higher than any other modification availed on a delinquent loan, which eventually resulted in a foreclosure. Therefore, lenders are providing homeowners with more alternatives to help them deal with difficulties in mortgage payments and assist people who do not qualify for a federal modification.
Home Affordable Modification Program distributes a monthly report. The October report stated that majority of people who applied for the federal loan program did not qualify for the program or their applications were rejected. The report also mentioned that borrowers that received alternative amendments were up for foreclosures or their trial modification had been cancelled.
Most of these alternatives are custom made as per individual requirements and in several cases the alternative programs do not abide by federal regulations laid down for modifying a loan. Lenders determined that due to some stringent federal guidelines, several borrowers were disqualified from a federal mortgage program. Under the alternative program, companies like JP Morgan & Chase helped 50,548 people whose trial modification was cancelled and about 85,354 people who were not accepted for a federal program.
Similarly, Citigroup helped 35,306 borrowers who were in midst of a foreclosure process with various alternatives. Wells Fargo assisted 63,877 homeowners with different options and GMAC mortgage aided 33,686 property owners with alternative modifications. Despite these options, several homeowners have complaint about the program being unsatisfactory and servicers are facing various issues while implementing it. Moreover, borrowers themselves are encountering payment affordability issues even after the alteration; this is due to problems like unemployment and underemployment.
Nevertheless, it is recommended that if the borrowers are facing foreclosures or having issues with their mortgage payments they should contact their lenders to avail either the federal or in-house alternative modification programs.
Original post: http://www.e-foreclosuresearch.com/blog/alternative-modifications-program-foreclosures/ on E-ForeclosureSearch.com, your source of foreclosures.
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