The Obama Making Home Affordable Program has been assisting homeowners with a variety of mortgage troubles over the past months. The plans within this program have extended to provide assistance for homeowners struggling with various mortgage elements or financial difficulties like an underwater mortgage or unemployment. When it comes to underwater mortgages many homes across the nation have lost value, which has put both lenders and homeowners in a bad situation.
However, their are lenders who are offering principal reductions on homes whose value has dropped substantially. Yet, not all lenders are on board with principal reductions on a wide scale and differ in their implementation of this type of mortgage aid.
Yet, there are alternatives aside from principal reductions for homeowners who are struggling with an underwater mortgage. Lenders who feel that principal reductions should be used sparingly are offering both alternatives to underwater mortgages and foreclosure prevention options.
Short Sale options, Deed In Lieu Of Foreclosure options, and even underwater refinancing plans are available to help homeowners who may be struggling with an underwater mortgage payment. While it seems the majority of lenders feel that in areas where homeowners are unlikely to regain value in their home or in cases where homeowners are having trouble paying their home loan payment because of a loss in their home’s value, a principal reduction should be used. However, homeowners seeking a principal reduction should know there are other plans which many mortgage providers may try instead of a principal reduction.
Homeowners who are having trouble with an underwater mortgage are being advised to contact their mortgage lender to talk over assistance options and formulate a plan to either make their underwater mortgage payment more affordable or escape their underwater home loan without doing a great deal of damage to their credit score.