Numerous assistance programs are in place to aid homeowners experiencing a variety of mortgage difficulties, but one way that homeowners who are facing negative equity have been able to gain the affordability they need is through the Fannie Mae and Freddie Mac underwater refinancing program. Through the Home Affordable Refinance Program, homeowners may be able to find assistance when their underwater situation has caused difficulty in their life concerning the payment of their home loan.
Obviously, not all homeowners will qualify for this particular underwater assistance plan, but homeowners with Fannie Mae or Freddie Mac are being advised to consult their mortgage servicer about these opportunities as negative equity remains a hurdle for many homeowners, especially in cases where the loss in a home’s value has created mortgage payment obligation problems.
While these programs have not been guaranteed to help all homeowners avoid the loss of their home, they are in place to aid homeowners who may face foreclosure if a lower mortgage payment opportunity is not presented. Certain homeowners may still be able to meet their monthly mortgage payment obligation despite having seen the equity in their home decrease over the past months. In these cases, underwater refinancing may be available but some servicers have been hesitant to aid homeowners who are not having payment difficulties.
Yet, the problem which has arisen in areas where banks are unwilling to provide underwater assistance to homeowners that are current on their mortgage comes in the form of strategic defaults. Homeowners are obviously angry when they see a great deal of loss in their homes equity, as many see their house as an investment, which they will sell in the future for, what is hoped to be, a profit, and perhaps relocate to a more affordable living arrangement later in life.
While homeowners have been tempted to simply leave their home when their property’s value has plummeted, some offers for these underwater refinancing opportunities, like this program from Fannie Mae and Freddie Mac, may bring more affordability through a lower interest rate or the adjustment of mortgage terms, and for some homeowners this underwater refinancing will have no negative impact on their credit score but could allow them to avoid the loss of their home.
Each case may vary concerning homeowners who qualify for the Home Affordable Refinance Program, but homeowners can consult resources like the Making Home Affordable website, their servicer, or HUD-approved housing counselors for additional guidance through their current mortgage situation.