Foreclosure prevention efforts for homeowners through federal and institutional programs have often centered around either extending a homeowner’s mortgage terms or lowering their interest rate to a more affordable level. While this has been helpful for numerous individuals who face the loss of their home, more homeowners are calling on major financial institutions to better implement federal foreclosure prevention plans and in-house alternative plans to prevent the loss of homes.
Obviously, homeowners may be able to benefit from lower interest rates on their mortgage if affordability is the problem, but many are able to take advantage of lower rates by more traditional means. Home loan interest rates have been quite low over the past months and, for some homeowners, this has presented the opportunity for refinancing to a lower rate and subsequently a lower monthly mortgage payment.
It goes without saying that homeowners who are able to lock in a lower home loan rate or refinance to a longer mortgage term, like a 30-year fixed rate mortgage, can benefit as many of these opportunities often lower a homeowner’s monthly payment obligation. Also, there were even certain cases where a homeowner was able to refinance for a shorter mortgage and, get an affordable monthly payment, which set them on a road to erasing their mortgage debt in a timelier manner and at an overall lower cost.
Yet, underwater mortgages have proved to be a great stumbling block for many homeowners who may benefit from traditional refinancing. Opportunities to refinance underwater mortgages are available, but many homeowners have stated that these plans are not widely available to all homeowners suffering from a loss in their property value.
However, even homeowners who may not be able to refinance through traditional means may still get similar benefits from federal foreclosure prevention modification programs. Reports indicate that many servicers use term extensions on mortgages and may even reduce a homeowner’s interest rate in cases where a homeowner runs the risk of defaulting on their home loan. While these foreclosure prevention programs have not been perfect and mortgage servicers are being called on to up their efforts in order to prevent the loss of homes across the nation, homeowners do still have various assistance opportunities available to help them with their mortgage difficulties through plans like the Making Home Affordable Program and servicer-direct assistance opportunities.