Government Mortgage Debt Relief
Banks have begun to increase the amount of loan modifications that they are offering to their clients, surpassing the rate at which government mortgage debt relief is helping consumers. According to some analysts, these banks are coming to realize that excessive foreclosures are not the best solution for consumers or the banks themselves.
With their own programs for preventing foreclosures, banks are doing almost two times the amount of loan modifications than they were previously doing under Obama’s Home Affordable Modification Program, or HAMP.
Many banks have received criticism for their lack of actions in helping homeowners. As the mortgage crisis began to cause problems for many people in 2007, servicers of loans decided to tack on homeowners’ missed payments, which only added to the problems and criticism.
Still, a significant amount of banks are creating their own initiatives to help with the many foreclosures nationwide. Loan servicers have finished almost 644,000 loan modifications this year. Obama’s HAMP program, however, has only completed 332,000 modifications.
More and more homeowners are looking to banks to do modifications outside of HAMP, which has been criticized for its ineffectiveness. Advocates for housing are calling on banks more and more to help homeowners by reducing principal. And banks are beginning to respond, with Wells Fargo and others reducing billions of dollars in principal on thousands of loan modifications since 2009. It seems that any homeowners are looking to banks to help them where Obama’s program has – unfortunately – not.
Photo courtesy: TheTruthAboutMortgage / Flickr
