There have been reports that underwater homes are increasing in value but there are also indications that underwater homeowners still face foreclosure. Yet, there have been programs that are offered to homeowners with an underwater mortgage that may allow them to refinance their home loan in order to attain a more affordable home loan payment, thus avoiding foreclosure.
Refinancing opportunities like those given by the Home Affordable Refinance Program have helped homeowners in some cases where their underwater mortgage has become too burdensome. Certain types of home loans cause homeowners to suffer when the value of their home decreases and from this refinancing program certain options have been given to those who have a home loan that is owned or guaranteed by Fannie Mae or Freddie Mac.
Also, the Federal Housing Administration has set forth a program that will begin in September to help homeowners who are severely underwater and in need of refinancing opportunities or a principal reduction. While this program may offer homeowners a new home loan payment or opportunities to obtain an FHA-backed mortgage, it could also make an underwater mortgage more affordable by working with mortgage services to lower principal amounts.
In the past months, there have been mortgage servicers who have also stated they are offering principal forgiveness plans for homeowners who can’t afford their home loan payment despite having an underwater mortgage. Some homeowners who continue to make their monthly mortgage payments may see their principal drop over time so that their home loan principal will be more in line with their home’s market value.
While underwater mortgages still cause a problem for many homeowners who are unable to meet their mortgage costs, there have been refinancing plans like these implemented or set to begin which can be beneficial for underwater homeowners. While there have also been short sale options created to help homeowners rid themselves of an underwater mortgage if assistance is not available, homeowners who have an upside down home loan but simply want a more affordable payment may now have more options which can afford them a cheaper mortgage principal or monthly home loan payment.