Homeowners with an underwater mortgage may have refinancing opportunities and the chance to have their mortgage principle reduced thanks to programs aimed at assisting homeowners with an underwater mortgage who may be struggling with their monthly payments. The Federal Housing Administration and the Home Affordable Refinance Program have been instituted as a way for underwater homeowners to find the assistance they need in situations where the loss of value in their home has caused a difficulty.
In situations where homeowners owe more on their home than their home is worth, homeowners have found that making mortgage payments are difficult with some mortgages or, thanks to other financial troubles, some are simply unable to find an affordable mortgage payment solution on their home. While some have been able to take advantage of home loan modification plans, these underwater mortgage assistance opportunities have been set in place to help homeowners who are specifically struggling due to underwater mortgage situations.
The FHA refinance plan for homeowners may allow for principal reductions and underwater refinancing opportunities for those who qualify. While there are critics of this program who feel that a lackluster performance is inevitable, it’s hoped that homeowners will be able to work out a principal reduction with their mortgage servicer and refinance their home to an FHA-insured mortgage, which could be cheaper than their current mortgage situation.
Also, some homeowners have been able to take advantage of the Home Affordable Refinance Program, which allows homeowners who have a mortgage that is owned or guaranteed by Fannie Mae or Freddie Mac to refinance for a more affordable monthly mortgage payment. While underwater homes have been a source of financial burden for many, it’s hoped that these underwater refinancing and principal reduction opportunities will be helpful to those who are suffering in their current mortgage predicament.
While there had been mortgage servicers who were reported to have offered earned principal forgiveness plans for homeowners who continue to make their mortgage payments despite being underwater, homeowners who cannot make their home loan payments and cannot refinance under traditional conditions may find alleviation from their troubles through these refinancing opportunities.