Homeowners with an underwater mortgage are obviously in a very frustrating situation since they owe more on their home than their home is worth. However, there are some lenders who are offering principal reduction programs for these underwater homeowners and lenders who may be hesitant to use principal reductions are offering alternatives for struggling homeowners.
Many people have seen the value of their homes decrease substantially over the past few months. It’s for this reason then the Obama Administration has been requesting that lenders make principal reductions in order to help the troubled homeowners with their underwater mortgage.
Some lenders feel that using principal reductions is a good way to deal with underwater mortgages but others believe that principal reductions are unfair to lenders and they feel that there are only specific cases where a principal reduction may be warranted. However, there have been refinancing plans for underwater homeowners and other forms of assistance for those struggling in a home where they owe more than it is worth.
Homeowners who may want to get out from their underwater mortgage also have the option of short selling their home, if their lender agrees to work with them in this area. Many homeowners have been walking away from their home because they’re so frustrated but short sales are becoming more of an option and can do far less damage to one’s credit score than walking away.
It’s being advised that homeowners that want to deal with their underwater mortgage or who are having trouble paying on their underwater mortgage should contact their lender and seek out assistance options that may be available to benefit them in a difficult situation.