This week Bank of America reported that it has now permanently modified just under 33,000 home loans through the HAMP program. Just over 12,000 modifications took place during the past month.
HAMP, otherwise known as the Home Affordable Modification Program, is a government stimulus program that is designed to help struggling home owners remain in their homes. With the economic collapse and the housing markets down fall, many homeowners have been left with mortgage payments that they simply can no longer afford. HAMP is designed to help homeowners stay in their home by lowering their payments. Their adjusted monthly payment is affordable and keeps them from being forced into foreclosure.
The program requires homeowners to go through a lengthy process to a permanent modification. Borrowers must first go through a three month trial period, making their modified loan payment. They must also provide necessary documentation, like proof of income, to qualify. Bank of America’s high modification rate for last month is promising news that homeowners are getting the help they need.
“We anticipated the momentum of completion of HAMP modifications would build as we entered spring, and we’re seeing that,” said Jack Schakett, loss mitigation strategies executive for Bank of America. “As more homeowners have completed their required trial payment period and provided the information necessary for underwriting, an increasing number of Bank of America customers are receiving long-term assistance through the government initiative and the efforts of our associates.”
Bank of America is also being proactive in other modification programs. As of April first, they are the first major lender to start offering modifications on 2nd mortgages. This is a new program also under the HAMP stimulus program.
They are also in the process of helping home owners that do not qualify for permanent loan modification through HAMP. This is another stimulus program that helps to prevent foreclosures, only this time through streamlined short sales. The program is aimed towards people that even with a loan modification, would not be able to afford to stay in their home.
Bank of America also reports that they have been internally running their own home modification programs. Since January 2008 they have additionally assisted over 500,000 of their home loan customers through their own modification programs.