Underwater homes have been a trouble that many homeowners have faced over the past months as the value of homes across the nation have dropped and homeowners have been left owing more on their home than their home is actually worth. While some mortgage servicers have offered in-house solutions to these troubles, like principal reductions, and the Obama administration launched the Home Affordable Refinance Program, a new program beginning September 7, 2010 may help homeowners who are struggling from an underwater home loan.
The Federal Housing Administration is said to offer certain underwater homeowners who are non-FHA borrowers the opportunity to refinance their underwater mortgage. This will work for homeowners whose lenders agree to write off at least 10% of the unpaid principal balance on their primary mortgage and, obviously, it will be offered for homeowners who are current on their mortgage by extending the opportunity for a homeowner to qualify for a new FHA-insured mortgage.
Underwater mortgages have been very frustrating for many homeowners across the nation as many have strategically default, meaning they simply walked away from their home loan obligation, while others struggle to make their mortgage payment due to the loss of value in their home. Many believe that inflated home prices are the reason for such drops in the values of homes across the nation and homeowners believe that they are owed some form of underwater assistance.
Homeowners who have an underwater mortgage, are current on their home loan payments, and can qualify for an FHA loan may be able to see results from this refinancing opportunity and also see a reduction in their home’s principal amount. Again, underwater home loans have been quite difficult for many homeowners but with various programs now in place and programs like this FHA short refinance plan set to begin soon, more homeowners may find the assistance they need to make their underwater home loan more affordable.