Homeowners have been facing a mortgage dilemma in which their home has dropped in value and they now owe more on their mortgage than their home is worth. Some lenders feel that this is simply part of the risk a homeowner took when they signed their mortgage but homeowners are asking for assistance as some home prices have dropped so substantially that there may be little chance of a homeowner recouping that loss.
There are many who feel that these drops in home values are a result of an overinflated housing market and because of this a principle reduction is in order. Some homeowners may be able to benefit from a principal reduction as many lenders are using principal reductions as a form of mortgage assistance.
However, there are lenders who feel that principal reductions shouldn’t be used for a wide range of homes, but rather only in cases where a homeowner is in an area where home values are not likely to be regained or in an instance where a homeowner is having trouble paying their mortgage as a result of the loss in value.
Those homeowners who are suffering from an underwater mortgage may be able to get some form of assistance outside of principal reduction so that they can afford their home loan payment. Some others are also helping homeowners short sell their home so that they can escape their underwater mortgage and not run the risk of facing foreclosure.
While dealing with an underwater mortgage is tricky for many homeowners and lenders, there are options out there which could help underwater homeowners. It’s being advised that homeowners with an underwater mortgage should contact their lender and talk over what options might be available to deal with a home whose value has dropped over the last few months.