Wells Fargo, one of the big lenders in the Making Home Affordable Program, now may be able to offer homeowners more options to help with their mortgage needs. The Obama Administration has asked the lenders start doing more for underwater mortgages by offering homeowners principal reduction plans.
Underwater mortgages have caused many homeowners to grow so frustrated that they are simply choosing to walk away from their mortgage obligation. While many see this practice and principal reductions as unfair, it’s hard to deny the fact that having a mortgage worth more than a home is a frustrating situation.
It’s hoped that these principal reduction plans are going to help homeowners, that are thinking of just walking away from their home, by lowering the principal on their mortgage, over time, if they keep their mortgage payments current and don’t miss making any payments.
While this can do a great deal to help homeowners, no lender is going to be perfect in their implementation of this program and not all homeowners that want a principal reduction will likely get one. However, underwater homeowners should be aware of this new option in principal reduction plans and should talk with their lender to see if they can be helped.