Underwater homes have been a major problem for many across the nation as home values have decreased over the past months. Homeowners in many cases are faced with a situation where they owe more on their home than their home is actually worth. This is obviously a frustrating position for homeowners and, in some cases, homeowners have grown so angered that they have simply walked away from their home and defaulted on their mortgage.
However, underwater mortgage assistance as been offered from a variety of lenders and through various plans. Commonly, principal reductions or underwater refinancing opportunities have been made available in some cases and from certain lenders to homeowners who meet specific qualifications. There are lenders who offer principal forgiveness plans for homeowners who can’t afford their home loan payment but may be underwater. These homeowners, if they stay with their home and continue to make payments, may see a reduction in their mortgage principle to a level that is more in line with their home’s current value.
While not every mortgage lender believes that principle reductions are to be used on a wide scale, many seem to agree that in areas where homeowners are unlikely to see an increase in their home’s value in the near future or in cases where homeowners can no longer afford their monthly mortgage payment due to having an underwater home, action needs to be taken. Homeowners can talk with their mortgage servicer about principal forgiveness programs, but it may be dependent upon who their home loan provider is as to what paths may be available in dealing with an underwater mortgage.
Also, there are underwater refinancing opportunities for homeowners who have a home that is owned or guaranteed by Fannie Mae or Freddie Mac. Homeowners in these situations may be able to refinance their underwater mortgage for a more affordable rate and home loan payment. Obviously, when homeowners are struggling to pay on a home whose value has decreased below what is still owed, something needs to be done to prevent homeowners from simply walking away.
While underwater mortgages do have options when it comes to assistance plans, homeowners can either consult the Making Home Affordable website or talk with representatives from their mortgage lender about what options are available for their specific underwater mortgage situation. While there are short sale options available for homeowners who want to be clear of their underwater mortgage, individuals who simply want to keep a roof over their head also have various plans that can be offered to help them deal with their underwater home loan situation.