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Government program to help pay off debt on home loans gets new guidance
01/30/2010
Along with credit card debt, one of the major sources of financial difficulty a person can face is a foreclosure.
However, the government has taken steps to try and help people avoid losing their homes, which could damage their financial standing. The Home Affordable Modification Program brings lenders and borrowers together in an effort to modify home loans in a way that averts foreclosure.
Recently, the Treasury Department announced new guidelines for the program with the goal of trying to get more trial loan modifications converted into permanent plans.
"With more than 850,000 homeowners in trial and permanent modifications, we are providing immediate relief to struggling homeowners," said Phyllis Caldwell, chief of Treasury's Homeownership Preservation Office.
Through the changes, a standard packet of documents will be provided to homeowners before they are offered a trial modification. Lenders will also get new guidelines on how to convert homeowners into permanent modifications, which should help them while dealing with trying to pay off debt.
The program has received criticism since it started last year, with lenders saying that the government's plan wasn't clearly thought out, while borrowers complained that documents were not easily obtainable.
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