Many homeowners that are suffering from an underwater mortgage have been looking for assistance options from various lenders. Principal reductions have been at the forefront of mortgage assistance discussions, when concerning underwater mortgages, but many lenders are not on board with principal reductions on a wide scale.
However, the majority of lenders agree that in situations where a homeowner is having difficulty meeting their mortgage payment or their home is in an area where they have lost value and are unlikely to regain any of their home value, a principal reduction may be in order.
Yet, homeowners with an underwater mortgage are still asking for options when it comes to dealing with their situation, as owing more on a home than the home is worth is a very frustrating situation for anyone. There are alternate options if a lender is unwilling to make a mortgage principal reduction on an underwater home. If a homeowner is indeed suffering and not able to pay their mortgage payment there may be refinancing options from the Obama Home Affordable Refinance Program.
Also, many homeowners who have been so frustrated with their mortgage being higher than the value of their home have simply walked away from their mortgage obligation. However, many lenders are working with homeowners to make short sales on their homes so that a homeowner can get rid of an underwater mortgage without facing a foreclosure.
Underwater homeowners are being advised to contact their lender about what options may be available for their specific situation. While something like a short sale may not be the optimal choice, it’s better than walking away from an underwater mortgage and doing a greater amount of damage to your credit score. Lenders have various ways of dealing with underwater mortgages, so a homeowner should seek out those options so that they can avoid foreclosure and possibly ruining their credit score.