Many homeowners have suffered from an underwater mortgage due to the fact that housing prices have dropped in many areas across the nation. For this reason, certain underwater mortgage assistance plans were made available to homeowners through various mortgage servers and institutions.
Underwater mortgage refinancing opportunities have been made available from the Obama Administration’s Home Affordable Refinance Program and a program that is set to begin shortly from the FHA. These underwater refinancing plans may help certain homeowners who are having difficulty making their home loan payments and risk the loss of their home due to the fact they have lost value in their property.
Principal reductions are another but less common method that is used by some mortgage servicers. Earned principal forgiveness programs were made available to some homeowners who would continue to pay on their underwater mortgage and, over time, see a drop in the principle they owe as long as they kept their payments current for a set period.
There have been reports that underwater homeowners have been facing foreclosure in some cases, and some reports which look favorably on the underwater mortgage situation are thought to be swayed due to the fact that many homeowners have lost their home. There are those who feel that reports stating fewer homeowners have an underwater mortgage do not take into account those homeowners who have simply lost their home because they could not afford their underwater home loan payment.
However, for some homeowners who owe more on their homes than their home is worth, these underwater mortgage refinancing plans may be available. In some cases, principal reductions may be used to help homeowners avoid the foreclosure process and find a more affordable underwater mortgage payment until the value of their property returns.