Underwater Refinancing Through HARP And Home Value Decreases In 2011–What Assistance Is Still Available In May?

In the early parts of May, reports from the first quarter of 2011 stated that home values continue to decrease to such an extent that it was the biggest drop in a quarter since 2008. Homeowners are still struggling when it comes to the devaluation of their homes despite the fact that there are men and women who are able to take advantage of programs like the home loan modification initiative as a way to help them afford mortgage payment costs when difficulties are in place, like unemployment, which have made it hard to meet their mortgage payment obligation. However, some question whether underwater refinancing is helpful or even still available, but also, many questions still arise as to what underwater mortgage assistance plans are still available here in the month of May.

While there are opportunities for homeowners to address negative equity, there have been mixed reports on what the future of the housing market could entail as many feel housing has yet to hit bottom, but some banks are of the mind that improvement in the housing market could be seen at the end of 2011 or early 2012. Yet, many still remain pessimistic about the future of home prices as high levels of unemployment remain in place, which have led to foreclosures, and since there are a great deal of homes simply sitting empty, the number of homeowners needed to fill these homes, which could help improve property values, are simply not being seen at the present time.

When it comes to avoiding the loss of a home or the temptation to walk away from an underwater mortgage, there are still opportunities that homeowners have and are being prompted to explore even though the housing situation and property value predicaments that homeowners face can be quite discouraging. Homeowners do need to understand, though, there are benefits that can be gained through programs like the Home Affordable Refinance Program, and as a result underwater homeowners should look at these options before considering more extreme measures.

Homeowners have also been prompted not to view their home as an investment but simply as a place to live simply because those who feel that their property value may never return and simply walk away can do a great deal of damage to their credit score, which could put them in a position where it may be years before a lender will even allow them to consider buying a new home. On the other hand, homeowners who are looking into a refinancing option must make sure that the closing costs will be affordable and comparable to the amount of savings they will receive.

It’s common sense that not every homeowner in a negative equity position will benefit from this particular program or even qualify for help from HARP, but those who do must look at not only the interest rate reduction and mortgage payment reduction that will come with refinancing an underwater home loan, but officials suggest homeowners look at the costs that will come with closing as a high amount in closing costs could erase any benefits a homeowner would see from doing so. When it comes to homeowners seeking an underwater home loan refinancing option for the purposes of finding more affordable payments so that foreclosure can be prevented, there are usually more options available, like those through HARP or FHA programs, but some homeowners who are simply looking for a principal reduction and can still afford their home loan payment may not have the opportunities to overcome the devaluation in their home if affordability is not an issue.