Underwater mortgages have caused many homeowners a great amount of trouble in a variety of ways. Some homeowners see their house as an investment, while others simply see it as a roof over their head, however, an underwater mortgage makes paying on a home difficult for both of these types of homeowners.
Homeowners that see their home as an investment have been asking for principal reductions simply because they want to pay less on their home in the hopes that they can sell for a profit in the future. It’s understandable that homeowners who view their home as an investment will want to have a positive return, but many lenders have been unwilling to help homeowners in this position with the principal reduction simply because there is no guarantee that a home will increase in value.
Yet, for those homeowners who are simply looking to keep a roof over their head, a principal reduction may be one way in which they are able to afford their mortgage. Homeowners that have been struggling to meet their mortgage payment because their home is underwater have been able to get assistance from lenders.
It seems that lenders are more willing to offer principal reductions if a homeowner can’t pay their mortgage due to a loss of value in their home. Yet, there also remains homeowners who simply want a short sale and to be rid of their underwater mortgage.
There have been problems in this area due to second mortgage holders and their unwillingness to make this type of sale. Second mortgage holders usually don’t benefit as much from a short sale as primary mortgage holders, so there have been difficulties when homeowners are negotiating a short sale.
Short sale incentives for second mortgage holders have been offered and will hopefully allow underwater homeowners to get their home sold in a timely or manner without much trouble.
Homeowners that do have an underwater mortgage and may be struggling are still being advised to contact their mortgage lender about what options may be available. Principal reductions may not be easy to obtain from certain lenders but there are alternatives that should be able to provide the assistance a homeowner needs.