Homeowners have faced the odd situation of widespread devaluation on homes across the nation, and as a result, many are looking for ways in order to handle this underwater mortgage problem. Since so many homes have seen a loss in value, there have been suggestions made by homeowners and officials as to how lenders can help homeowners in a situation where they owe more on their home than their home is actually worth.
Principal reductions have been one way in which homeowners have suggested lenders deal with underwater mortgages. Principal forgiveness programs have been offered by some lenders who have homeowners that are in an area where they are unlikely to recover losses they have sustained on their home or in cases where have had trouble making their home loan payments as a result of losing such a substantial value in their home.
While an earned principal forgiveness program is not something that every mortgage lender has adopted, nor are principal reductions in general something that all lenders believe should be used on a wide scale, there are some financial institutions that are helping homeowners in these underwater mortgage situations with principal forgiveness. Yet, even some financial institutions who do not like principal forgiveness programs may be willing to offer their homeowners a principal reduction in certain cases.
A principal forgiveness program depends on a homeowner’s personal situation and their lender, so homeowners are being advised to talk with their mortgage lender and ask about programs that may be available to help them deal with their underwater mortgage situation. Lenders have been working more with underwater homeowners in order to prevent individuals from walking away from their mortgage obligation when they have lost value in their home.
There are also underwater refinancing opportunities for homeowners who have a home that is guaranteed or owned by Fannie Mae or Freddie Mac. Mortgage interest rates have been quite low over the past months but underwater homeowners have been unable to refinance and obtain a more affordable home loan payment, so these underwater refinancing opportunities have been made available to some as another means of assistance when it comes to dealing with underwater mortgages.