Underwater Mortgage Home Loan Payment Assistance–Options For Homeowners Facing Hardships And Foreclosure

Underwater mortgage assistance for homeowners who are financially distressed and may fear that foreclosure is near at hand do have payment assistance options that can address negative equity issues, as well as, problems that homeowners may have related to other financial factors in their life that are not the result of poor financial management or cases where consumers have simply spent beyond their means. Obviously, options that homeowners may have when they are in a financially troubling situation, facing a variety of hardships and fear that foreclosure may be their only option are not always easily obtained, but advisers want homeowners understand that exploring these options and keeping in touch with a mortgage servicer or contacting a housing counselor are all aspects of the foreclosure prevention process that may need to be used when a negative equity and financial problems have arisen.

For example, some homeowners have seen issues related to unemployment or even medical expenses arise and, as a result of being in a negative equity situation, cannot afford their home nor can they afford to sell at a loss, as even short sale agreements must be approved by a lender. Yet, for those who are facing this particular type of underwater mortgage issue, advisers at Bankrate.com have suggested that homeowners produce a new hardship letter if changes in their financial position have arisen where meeting their underwater payment may be difficult and, in certain circumstances, “The bank may consent to renegotiating your mortgage terms to avoid a short sale or the expense of absorbing yet another foreclosure.”

Understandably, some homeowners have had issues related to paperwork and their servicer either losing what they have sent to them or simply causing frustrations on the part of a homeowner due to what seems to be a lack of organization. However, homeowners may be able to more easily make it through this process if they contact a reputable housing counselor, like those available from the Making Home Affordable Program and HUD, but also, many advisers suggest that making copies of any documents that a homeowner sends to a lender and keeping note of any representatives that a homeowner speaks with are all ways to help streamline the process of receiving home loan assistance.

Yet, there are still homeowners in a negative equity situation who continue to strategically default and, according to an article on WalletPop.com, homeowners who usually default on their home loan are those who may be in a good credit position, may manage their credit card debt well, and may not have lived in their home for a substantial amount of time, but officials are still confused as to why homeowners are putting other forms of debt at a higher level of priority than their mortgage.

However, homeowners who view their home as an investment are usually those who feel that defaulting may be in their best interest as they can avoid a great deal of financial distress by attempting to stay afloat on their underwater mortgage payments, and are focusing their income on other debts like credit cards. There are though, homeowners who want to keep a roof over their head and will not walk away from their mortgage obligation simply because they owe more on their mortgage than their home is actually worth, so in these cases, underwater mortgage home loan payment assistance plans are available and may need to be explored. Obviously, some unforeseen circumstances that may lead to medical expenses, as an example, can create a great deal of financial distress, but for homeowners who are simply seeing the equity on their home decrease but are in a position to meet their mortgage payments, there may be fewer underwater assistance options available.  However, they may still be able to contact their servicer to inquire about any principal reductions or affordability options that could be available for their situation.