When the Make Home Affordable initiative was announced by President Obama, many of the tens of thousands of homeowners struggling to maintain their house payments breathed a sigh of relief.  It seemed help was finally on the way for consumers who have been hit hard by the recession and tough economy.  Unfortunately for many of the individuals who have applied for help to avoid foreclosure, assistance is somewhat elusive.  Here we look at some of the problems reported by both the major lenders as well as applicants going through the process.

Not enough help

One of the biggest complaints regarding loan modifications through the program is the lack of available help.  With foreclosures at an all time high and millions of people affected by the economy, the number of people in need of help appears to surpass the help available.  Most of the major loan servicers are participating in the Make Home Affordable program, yet compared to the number of applicants, the number of modified loans seems rather small.  According to the Wells Fargo servicers report for July 2010 Make Home Affordable program, out of 177,267 trial loan modifications that had been started, just over 22,000 trial modifications are still in progress with over 46,000 permanent loan modifications being made.  What happens to the remaining applicants that have been denied?  Do those homeowners have additional help, or do they proceed to foreclosure?  These are important things to consider when working with a loan servicer on a loan modification to stay in your home.

Seeking assistance elsewhere

If you are eligible for the Make Home Affordable program through your lender, applying for a loan modification is an option to help you prevent foreclosure on your home.  Keep in mind when applying for this assistance that over 100,000 Wells Fargo applicants were not eligible for the trial loan modification and just under that number have started the process only to have the trial modification canceled.  Those individuals have been forced to seek assistance elsewhere in an attempt to save their home.

Loan modification tips

For those who have been through the process with Wells Fargo and other major lenders, the following tips are offered to help new applicants through the process.

• Research all available options including strategies to save your home outside of a loan modification.  Do not put all your eggs, or in this case, hope in one basket.  If the loan modification is approved then no further action must be taken.  If on the other hand your application is denied, you will have already taken the necessary steps to seek help elsewhere.
• Document everything for your own records.  Make a copy of all documents you send to the loan servicer and always send documents via a courier that can provide proof of receipt.  Document each phone call to include date, time, operate name and ID number as well as any relevant notes regarding the call.  A common complaint among both sides of this equation include paperwork that is not received to process the application.  This is frustrating to the homeowner as well as the loan servicer and can actually result in an application being denied.  For this reason it is imperative you keep copies of all documentation and note other correspondence.
• Follow up and ask questions.  With hundreds of thousands of people applying for assistance it is not hard to fall through the cracks.  A major problem with this program are applications that simply do not get the attention they deserve.  Do not allow weeks or months to pass without contacting you lender to see how the application is progressing.  Do not be afraid to ask questions to ensure you understand exactly what is going on and what is required of you.

We are living in trying times and many people are growing increasingly frustrated by what appears to be limited help from the government and big business.  Time is running out for many homeowners and affordable mortgage solutions remain out of reach for many.