Over the past months many homeowners saw the value of their home decrease substantially to the point where they owed more on their home than their home was actually worth. This is obviously a frustrating situation for many homeowners as underwater mortgages can be difficult to combat and can create instances where a homeowner cannot afford their home loan payment.
However, there have been mortgage assistance plans developed for underwater homeowners to assist those who are trying to save their home or allow homeowners to simply sell their underwater home loan so that they may be free and clear of a bad situation. While the severity of cases of underwater mortgages differ, homeowners across the board have been able to take advantage of these plans.
Certain homeowners have been able to use underwater refinancing opportunities in specific cases. For instance, refinancing is available for homeowners who have a home loan that is currently underwater but owned or guaranteed by Fannie Mae or Freddie Mac.
There are also certain lenders who are providing principal reduction plans on underwater homes through current principal forgiveness programs. Homeowners who have an underwater home loan may be able to continue to make home loan payments and see their principle amount forgiven overtime.
Both of these cases may also be available to homeowners who have lost value in their home and are in an area where housing prices are likely to be recouped in the near future. Some of these underwater assistance plans will be dependent upon a homeowner’s mortgage servicer, but certain underwater refinancing opportunities like the Home Affordable Refinance Program are an extension of the Making Home Affordable Program and can be available to homeowners who qualify.
There have been homeowners who were able to short sell their homes in cases where there was a loss in value and a homeowner was having trouble as a result or simply want to be free of their underwater obligation. Short sales require the participation of a mortgage servicer but have been beneficial for some homeowners who can no longer handle the responsibility that their underwater mortgage may entail.
Homeowners who have seen a loss in their home’s value are often advised to first talk to their home loan servicer for options that may be available if they are having trouble making their payments. In the case where a homeowner can still make their home loan payment but has a severely underwater mortgage, there may be other options available but, again, they sometimes are at the discretion of the lender.