Intended to help homeowners that are struggling monetarily by modifying their loan payments to make their loans a lot more affordable to them, the loan modification program was anticipated to help millions of individuals to save their homes.
Although this program was intended to help several home owners originally, very few have actually qualified for the program. In fact, the number of those who actually qualify for the Home Affordable Modification Program (HAMP) is so low that few individuals are questioning whether or not the plan should be abolished.
In addition to those who don't qualify for HAMP, there is also a huge number who do enter into the trial period just to default on the agreement, meaning that they are forced to drop out. For several people, a loss of income or other hardship means that they can't afford to pay their mortgages even after the modification.
One thing which might improve the statistics tied to modifications is that there's currently a backlog of those who are being accepted. Initially, after an application has been accepted, the homeowner will enter into a trial period before full-acceptance into the program. During this loan period, they're still showing as delinquent as opposed to being in modification meaning that there are still initial applications which haven't cleared through the system yet. This trial period is three months but many homeowners have been on trial for 6 months or more as the lenders struggle to clear the backlog. Once we see these lenders improve their procedures to clear these backlogs then we may see HAMP's statistics improve. This backlog may be deterring some from applying to the program because being left in limbo for such a long time, without any guarantee of being accepted fully, could be extremely damaging to credit ratings.
One more issue that is being looked into by administers of the program is the procedures that lenders use when dealing applications. It is thought that few lenders are miscalculating the incomes of several applicants and may even be putting them into their own modification programs when the government program is a lot more suitable. There are efforts being made to clean this up, though, and a lot more documentation is being requested from homeowners when they present their applications.
With the possibility of penalties being mooted for servicers who do make errors in the application process, it'll seem as though the government is serious about getting the whole system cleaned up and running smoothly. With mistakes, miscalculations and also documentation going missing, it might simply be a case of servicers providing their staff with improved training to ensure that the entire process to become more effective and more home owners accepted into the modification program.
Early results indicate that homeowners who do receive a permanent modification under the government program, the lower payment level might be affordable to them, with treasury data showing that only about 10 percent of borrowers who had been in a modification for six months or longer were more than two payments behind. Despite its problems figures such as these surely bode well for the future of modifications.
Although this program was intended to help several home owners originally, very few have actually qualified for the program. In fact, the number of those who actually qualify for the Home Affordable Modification Program (HAMP) is so low that few individuals are questioning whether or not the plan should be abolished.
In addition to those who don't qualify for HAMP, there is also a huge number who do enter into the trial period just to default on the agreement, meaning that they are forced to drop out. For several people, a loss of income or other hardship means that they can't afford to pay their mortgages even after the modification.
One thing which might improve the statistics tied to modifications is that there's currently a backlog of those who are being accepted. Initially, after an application has been accepted, the homeowner will enter into a trial period before full-acceptance into the program. During this loan period, they're still showing as delinquent as opposed to being in modification meaning that there are still initial applications which haven't cleared through the system yet. This trial period is three months but many homeowners have been on trial for 6 months or more as the lenders struggle to clear the backlog. Once we see these lenders improve their procedures to clear these backlogs then we may see HAMP's statistics improve. This backlog may be deterring some from applying to the program because being left in limbo for such a long time, without any guarantee of being accepted fully, could be extremely damaging to credit ratings.
One more issue that is being looked into by administers of the program is the procedures that lenders use when dealing applications. It is thought that few lenders are miscalculating the incomes of several applicants and may even be putting them into their own modification programs when the government program is a lot more suitable. There are efforts being made to clean this up, though, and a lot more documentation is being requested from homeowners when they present their applications.
With the possibility of penalties being mooted for servicers who do make errors in the application process, it'll seem as though the government is serious about getting the whole system cleaned up and running smoothly. With mistakes, miscalculations and also documentation going missing, it might simply be a case of servicers providing their staff with improved training to ensure that the entire process to become more effective and more home owners accepted into the modification program.
Early results indicate that homeowners who do receive a permanent modification under the government program, the lower payment level might be affordable to them, with treasury data showing that only about 10 percent of borrowers who had been in a modification for six months or longer were more than two payments behind. Despite its problems figures such as these surely bode well for the future of modifications.
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