Numerous homes have decreased in value across the nation this year and, as a result, there are some homeowners who now owe more on their home than their home is worth. Understandably, underwater mortgages have caused a great deal of trouble for many individuals but when refinancing opportunities are unavailable, some homeowners have found that they are unable to meet their monthly mortgage payment due to the loss of value they have seen in their home.
Yet, certain underwater home loan refinancing opportunities have been made available in the hopes of making underwater mortgage payments more affordable. Initiatives by the FHA and the Making Home Affordable Program have been set in place to assist homeowners in certain areas to find affordable underwater mortgage refinancing options.
The FHA recently launched a short refinancing program, which allows homeowners to refinance their underwater mortgage, receive a principal reduction, and obtain an FHA-insured home loan, which can bring a more affordable monthly mortgage payment for homeowners whose home value has decreased. While there are concerns over this program as it is believed numerous mortgage servicers will be unwilling to reduce principles, there may be hope for some homeowners through this program as principal reductions and lower monthly mortgage payments have been heavily sought out by underwater homeowners.
Also, homeowners who may have a home that is insured or owned by Fannie Mae or Freddie Mac could take advantage of the Home Affordable Refinance Program. In cases where homeowners qualify, underwater refinancing opportunities may be made available in order to allow homeowners who are struggling with their underwater mortgage payment to find a lower monthly mortgage obligation, which would help many avoid the loss of their home or further financial strains.
Not all underwater homeowners may find aid through these programs, but it’s hoped that these underwater assistance plans will help keep more homeowners in their home while home prices recover.