Many homeowners with an underwater mortgage are looking for options in dealing with a home that has a mortgage worth more than the home itself. There is a new principal reduction program open to homeowners with an underwater mortgage and also new incentives for banks that short sale homes.
It’s hoped these new initiatives from the Obama Administration will help homeowners that are struggling with an underwater mortgage and keep frustrated homeowners from walking away from their mortgage obligation.
Lenders that make short sales are being given governmental incentives to help underwater homeowners sell their home in the hopes that they, the homeowners, can simply get away from a bad situation.
Also, principal reduction options are available for homeowners looking to stay in their home but have seen the value of their house drop significantly. Homeowners feel that home prices were inflated so they are asking that their principal be reduced so that it’s more in line with the current value.
Homeowners that are looking to short sale are cautioned to be certain they are forgiven what is owed if they agree to the short sale so they still don’t owe their lender after they leave the home. Also, homeowners looking for a principal reduction are going to most likely have to continue to pay on their home, but will see a decrease in their principal over time.