Many homeowners who have seen the value of their home decrease sought out principal reduction programs, like earn principal forgiveness plans that are available through a variety of sources. Some financial institutions working within the Making Home Affordable Program have offered homeowners the opportunity to reduce the principal on their underwater mortgage, which can make a home loan more affordable or prevent homeowners from walking away in frustration.
Some areas of the country have been hit harder in terms of decreases in mortgage values and unemployment, so for this reason the Making Home Affordable Program has instituted a “Hardest Hit Fund,” which may help some homeowners obtain a principal reduction, or other form of mortgage aid.
Principal forgiveness programs are something that many mortgage lenders have toyed with or implemented over the past months as homeowners with underwater mortgages have grown more aggravated with their situation when they are paying more on a home in the home is worth. Accusations that home loan prices were inflated have caused many homeowners to demand a reduction on their mortgage principal since the value of their home has dropped such a substantial amount.
While there are some mortgage lenders who are working with homeowners by offering principal reductions, there are some mortgage lenders who do not believe that principal reductions should be used on a wide scale and some homeowners believe that principal reductions shouldn’t be offered to a select few just because a homeowner lost value in their house. There are some homeowners who are still able to pay their mortgage despite a loss in their home’s value and for these homeowners who may not qualify for a principal reduction, allowing others to be forgiven of money owed on their home is simply seen as unfair.
Yet, some homeowners, depending on their lender, may be able to obtain an earned principle forgiveness program opportunity or simply have their principal forgiven in some cases. Homeowners are often advised to contact their mortgage lender in cases where they have seen their home drop in value and are now underwater. While, again, a principal production is not available for every homeowner, there are some areas and cases in which most lenders believe a principal reduction may be warranted, so homeowners have been advised over the past months to begin by consulting their lender for assistance options to deal with their underwater mortgage.