Underwater mortgages have become a problem for countless homeowners, and previously, many individuals grew so frustrated with their situation that they simply walked away from their home. Obviously, this causes trouble for homeowners who default on their mortgage willingly and for the housing market in general, so programs were implemented for homeowners, like those who have a home that is owned by Fannie Mae or Freddie Mac to refinance their underwater home loan.
Homeowners with mortgages that are owned or guaranteed by Fannie Mae or Freddie Mac may be able to take advantage of the Home Affordable Refinance Program, which has been in place over the recent months and has offered refinancing opportunities for certain individuals. It’s understandable that a homeowner who owes much more on their home than their home is actually worth feels that there is little that can be done, but in cases where homeowners are simply trying to keep a roof over their head, these underwater refinancing plans have been greatly appreciated by homeowners who have qualified.
While these plans are not perfect, homeowners with Fannie Mae or Freddie Mac who are current on their mortgage payments but may not be able to refinance and take advantage of low mortgage interest rates which are currently available could have the opportunity to get a more affordable payment on their underwater home loan. Negative equity in a mortgage has caused numerous troubles for homeowners, but when homeowners have been unable to benefit from refinancing, this has simply added more problems to an already struggling housing market.
Typically, these underwater refinancing plans can benefit homeowners who, again, are current on their mortgage by offering options like interest rate reductions or adjusting the terms of a home loan. While some homeowners have attempted to use options like a short sale when an underwater mortgage seems hopeless, individuals who simply want a more affordable payment but have negative equity have been advised to contact their servicer to inquire about these assistance plans, since the sooner a homeowner begins to address their underwater situation, the higher the likelihood they may find the assistance they need.