Underwater Mortgages And Homeowner Strategic Defaults–Home Price Declines And Homeowner Underwater Assistance Plans

Underwater mortgages remain a major issue for a great number of homeowners across the nation as it is estimated that around one quarter of homeowners are in an underwater mortgage situation where they simply owe more on their home than it’s actually worth. Obviously, this is creating an environment where homeowners have grown incredibly frustrated at the limited options they may have for underwater home loan assistance plans and as some prices continue to decline or are predicted to stay low for the foreseeable future, many homeowners are wondering why they should remain true to their mortgage obligation.

Financial institutions are concerned over strategic defaults as more homeowners feel that walking away may be their only option, as again, underwater mortgages are becoming more common and creating financial trouble for homeowners in terms of their ability to make their mortgage payment. Homeowners who are having a difficult time meeting an underwater mortgage home loan payment do have options from the Home Affordable Refinance Program, which allows underwater homeowners to refinance their mortgage if it is owned or guaranteed by Fannie Mae or Freddie Mac and there are some banks that offer earned principal forgiveness for homeowners who are in a position to continue making their home loan payment.

Yet, numerous homeowners are angry over the condition of the housing market and continuing coverage in a joint effort by HuffingtonPost.com and MSNBC have been shedding light on various areas of the housing market that had been causing a great deal of trial for homeowners who are either in an underwater mortgage situation or who have had problems related to the federal Making Home Affordable modification program.

More homeowners are asking that underwater mortgage solutions be made available as simply offering modifications for more affordable monthly payments has also raised issues with many homeowners. There are those who feel that modifications, in the majority of cases, are simply set up to fail due to the fact that some homeowners may simply not be in a financial position to sustain modification payments. While many homeowners who may be able to afford their underwater mortgage payment feel there are few incentives for them to remain, it’s understandable that these issues in the housing market are greatly polarized in the opinions of homeowners and analysts, but the problems are very real to homeowners who may still be feeling setbacks from the recession.

While the home loan modification program has been unpopular among a great number of financial analysts, there are also mixed reviews from homeowners as some say they have been greatly aided by modification efforts while others have stated that the modification process was a nightmare which ended with the denial of home loan assistance and foreclosure.

Understandably, as predictions in 2011 state that more homeowners may face foreclosure than in 2010, there are calls for more foreclosure prevention efforts to be implemented or current programs to be revamped so that errors or abuses may be limited and homeowners who are in a position to benefit from a more affordable mortgage payment can do so without fear of being denied the help that will keep them in their home.

While, again, there are a few underwater mortgage assistance options from the Making Home Affordable Program, more homeowners are looking for principal reduction opportunities when they are able to make the mortgage payment, but for those who are struggling to make ends meet financially and are also playing on a home where they owe more than it’s actually worth, these homeowners feel that more options in terms of affordability on their payments need to be offered as many simply want to walk away from their underwater home loan and be rid of a frustrating situation.