JP Morgan Chase has had good numbers in the making home affordable program, but new extensions to the Obama Administration’s initiative to help prevent foreclosures in the form of principal reductions may not be offered. Stories on this subject found here and here state Chase is one of the only top lenders not offering principal reductions.
Many homeowners with an underwater mortgage say they will simply walk away from their mortgage if a principal reduction isn’t offered and this is causing banks to look for solutions, some reluctantly, for homeowners that owe more on their home than their home is worth.
There are analysts that feel that this drop in housing prices is due to the prices of homes being inflated in the past and in order to help the housing market get back on stable ground, homeowners are going to have to have some form of assistance.
However, there are those who feel it is unfair to offer principal reductions and homeowners should honor their mortgage commitment and take the loss, as there is nothing guaranteeing a home’s price should rise.
While this is true, the vast amounts of underwater mortgages popping up call for some form of action to be taken and it is hoped that lenders will get on board with principal reductions and by doing so help homeowners and the housing market.