Underwater mortgage assistance through the use of principal reduction programs have been used in a number of areas across the nation that have particularly been hard hit by negative equity and decreases in property values, but California homeowners are one of the specific groups that have continued to see trouble in terms of home prices and the need for underwater mortgage aid. Various initiatives to help homeowners with negative equity have been launched through different programs, but state-specific initiatives like the Hardest Hit Fund may be able to provide California homeowners with the underwater mortgage relief they need.
Recent, reports have stated that California home prices are down on average, which is the fifth month in a row where this state has seen decreases. Prices in California have been up and down over the past months, as there were increases from lows in 2009, but volatility still remains in the market and has created situations where homeowners are still struggling under the weight of owning a home where they owe more than the property is actually worth.
Yet, initiatives created by the Hardest Hit Fund have allowed for various states to implement numerous programs that may be able to address issues that range from unemployment to negative equity, and in California, the Keep Your Home Program has in place a principal reduction plan that may help homeowners address issues related to their negative equity and, as a result, could keep homeowners from walking away. Understandably, there are some homeowners who may have trouble meeting their mortgage payment when their equity drops substantially, but others have been trying to find more affordability in their underwater mortgage despite seeing drastic property value drops, but as there have been few solutions to homeowners who can’t afford their underwater mortgage payments, many have simply considered leaving their home as a result.
However, the Principle Reduction Program for California is hoped to help homeowners who are at risk of defaulting on their home loan due to the decline in their home’s value or, as a combination of both economic hardship and negative equity. Essentially, this particular program will offer capital to reduce the principal balance for a homeowner who qualifies, as this is hoped to provide more stability in the California housing market and, obviously, similar programs in other states have the same goal in mind.
When it comes to decreasing home values, various states are seeing different results in the housing market as some areas are simply staying even, while others are seeing increases or decreases, which again, has led to less stability in the nation’s housing market overall. Yet, in areas which are particularly being troubled due to foreclosures and negative equity, it’s hoped that either state-specific principal reduction plans or federal programs, like the Principal Reduction Alternative Program will be of further assistance in the coming months as homeowners continue to battle against negative equity and financial distress still stemming from the recession and factors like unemployment and foreclosures.