The Obama Making Home Affordable Program has been prompting lenders to offer mortgage principal reduction for those who are suffering from an underwater mortgage. Instances where homeowners owe more on their home than their home is worth is quite difficult and obviously frustrating. Some homeowners have even walked away from their homes as a result.
Principal reductions have been asked for by many underwater homeowners, but some lenders are hesitant to use this form of mortgage aid. Homeowners suffering from an underwater mortgage may benefit from principal reductions, but some lenders feel that only in cases where a homeowner is unable to make their mortgage payment or they live in an area where they are unlikely to recoup any of the value that was lost is a mortgage principal warranted.
Some homeowners have sought to short sale their home in hopes of getting rid of their underwater mortgage. Seeking a principal reduction or a short sale is a vastly better option than a strategic default, which again, many homeowners have opted to choose.
A loss of value in one’s home is a frustrating situation but homeowners with an underwater mortgage are being advised to contact their lender and ask about assistance options that are available. While not every homeowner will be able to get a principal reduction on their home loan, an underwater mortgage can be made more affordable so that a homeowner can at least keep a roof over their head.