Underwater mortgage assistance from the FHA’s short refinance program and initiatives to offer unemployed homeowners loans that will allow them to continue making their mortgage payments for a set period of time, or until an employment opportunity is acquired that will help them begin making repayments on their home without assistance, have faced some opposition over the past weeks, but these initiatives are still in place and hope to continue offering aid to homeowners in the coming months and throughout 2011.
Obviously, underwater homeowners have attempted to access programs like the FHA’s short refinance program due to the fact that it can not only offer an underwater homeowner the opportunity to refinance for a more affordable mortgage rate, but a principal reduction also comes as part of this initiative. Many homeowners have either had difficulty making mortgage payments when negative equity is present, but there are also homeowners who have attempted to find a principal reduction option from their servicer due to the fact that they have seen such substantial drops in their property value.
Programs like the Principal Reduction Alternative were set in place that allowed servicers the option of offering principal reductions to homeowners with negative equity as part of the Making Home Affordable Program, but not all financial institutions have been using principal reductions and even some that have are not doing so on a wide scale. However, delays in the implementation of the Short Refinance program are said to be one of the causes of the lackluster results which have been seen, but these delays are also said to be the reason some officials are opposing the FHA’s underwater home loan assistance initiative. Many officials believe that, due to low participation in the program, this is an area of funding that could be wasteful, which again, prompted officials to propose legislation to stop the short refinance program as a result.
Obviously, there are arguments that the FHA short short refinance program can be greatly helpful but has simply not had the chance to get off the ground. This is also said to be true of the Emergency Homeowner Loan Program, administered by HUD, which could help keep unemployed homeowners in their home during a time where they would face foreclosure due to the fact that they have been unable to find an employment opportunity which would keep them from the loss of their home. While opponents of this homeowner assistance plan have stated that, funds can be wasted due to the fact that homeowners may still face foreclosure even after assistance is offered, there is opposition to the cancellation of these programs too.
These are not the only two programs that are being opposed by many officials, as even the federal Making Home Affordable Program is said to be in the sights of these men and women who feel that these initiatives are unhelpful, wasteful and ultimately help banks rather than homeowners. Yet, there have also been indications that these plans, if passed in Congress, would likely be vetoed by the president and if this is the case will, hopefully, continue into 2011 and offer more underwater homeowners and unemployed individuals the option to save their homes from foreclosure and find more affordability when issues like negative equity are in place.