Underwater mortgage loss mitigation efforts from J.P. Morgan Chase may offer homeowners programs which can aid negative equity difficulties which many have faced over the past months as home prices have remained low in many areas and have still seen drops in others. Obviously, J.P. Morgan Chase homeowners are not the only ones who have seen troubles related to negative equity, but thanks to various initiatives from the Making Home Affordable Program and plans directly from mortgage servicers, there are options which homeowners may have to either avoid the loss of their home due to mortgage payment difficulties or ways to escape a negative equity situation.
Chase’s participation in the Making Home Affordable Program allows homeowners who have their home loan owned or guaranteed by Fannie Mae or Freddie Mac to refinance through the Home Affordable Refinance Program when negative equity is a problem. Typically, homeowners who may have an adjustable-rate mortgage, as an example, may have trouble meeting their mortgage payment when their property value drops and they are faced with a situation where they owe more on their home than their home is worth.
While these refinancing opportunities may be beneficial for some, there are homeowners who are still asking for principal forgiveness plans but certain servicers feel that forgiving a homeowner’s principle does little to help with the affordability they need to avoid foreclosure. While there may be earned principal forgiveness options or a portion of a homeowner’s principle forgiven after a permanent home loan modification is granted, many servicers are simply focusing on affordability issues rather than reducing a homeowner’s principle when an underwater mortgages present.
Yet, there have been homeowners with Chase and a variety of other servicers who have simply walked away from their mortgage obligation due to frustration related to their monthly mortgage payment and negative equity. While loss mitigation programs can offer interest-rate reductions, term extensions, or even principal forbearance, homeowners who view their home as an investment feel that anything less than a principal forgiveness offer will do little to help them in the future if they wish to sell their home.
However, there have been some individuals who have been able to qualify for short sale or deed in lieu of foreclosure plans which have allowed homeowners to avoid a formal foreclosure process after they have attempted to find a solution to their underwater home loan difficulties. While these initiatives are part of the Home Affordable Foreclosure Alternatives Program, there may be some servicers who can offer these plans to homeowners directly from in-house programs as well.
For homeowners who still need affordability in their underwater mortgage payment, these options are available but many advisers suggest that homeowners contact their servicer early so that they may begin exploring options which can be beneficial for their particular situation, as not all of these assistance plans will help homeowners in every situation. There are, again, opportunities for homeowners to find the affordability they need in their monthly mortgage payment, but in cases where homeowners fear the loss of their home to foreclosure, these foreclosure alternatives are also a solution which may be available to homeowners in an underwater mortgage situation. Despite the fact that homeowners would rather save their home, short sales and deed in lieu of foreclosure plans can help homeowner avoid taking a large hit to their credit score.