Wells Fargo homeowners struggling in an underwater mortgage may be able to get a mortgage principal reduction as part of the Obama Administration’s new expansion plans within the home loan modification program. Homeowners have seen huge drops in the value of their homes as of late and this new program is hoped to correct those decreases.
Homeowners with an underwater mortgage, in many cases owe over 100% of their home’s value. If $300,000 on a mortgage is still owed, but a home’s value is currently only around $200,000 or lower it’s easy to see why homeowners are growing frustrated in these situations.
There are some people, lenders as well, who aren’t on board with principal reductions and feel they are unfair or some lenders simply refuse to make them. However, homeowners argue that they were sold a home whose price was inflated and they are unwilling to continue on in a mortgage attached to a devalued home.
Lenders like Wells Fargo have been asked by the Obama Administration to help these struggling homeowners in their mortgage troubles by offering these principal reductions. Many homeowners have been walking away from their mortgage obligation, but it is hoped that these principal reduction plans will stop this from happening.