Homeowners with Wells Fargo are not escaping the widespread problem that has arisen with underwater mortgages and are now asking for principal reduction plans. The Obama Administration has asked that lenders start making more principal reductions for underwater mortgages in the hopes that homeowners will stick with their mortgage commitment and also provide benefits to the housing market as well.
Many people feel the reason for the numerous accounts of home prices falling is due to home prices being inflated in the past. Now, many homeowners are watching their home’s value drop significantly while still owing a great deal on their mortgage.
This situation obviously has homeowners frustrated and many are walking away from their homes as a result since they feel they will not be able to profit on their home as a because of falling home prices.
This is one of the reasons, along with analysts saying principal reductions are needed to stabilize the housing market, that the Obama Administration expanded their home loan modification programs to help homeowners with an underwater mortgage.
While not all homeowners are going to qualify for a mortgage principal reduction and there are sure to be troubles along the way, as we have seen in the modification program, homeowners should still be aware that there is the possibility of assistance through a principal reduction.