Home prices declined in March 2011, according to reports released here at the end of May, and this has led many homeowners to have a very dim hope that a recovery may come about in the near future, despite the fact that there are some who believe home prices may begin to rebound in certain areas by the end of the year. Homeowners have been incredibly angry over their mortgage situation, as factors out of their control are attributing to the downward spiral of home prices in many cities and major metropolitan areas, but homeowners are also still looking for underwater assistance opportunities or negative equity refinancing plans that may be available for those in need of more affordability so that they do not lose their home as a result of financial difficulties or strains resulting from being underwater.
Refinancing has been the focus of many homeowners as there are low interest rates to be had at the present time, since home loan rates have dropped to incredibly low levels, which is a change up from increases that were seen in the earlier parts of this year. Sadly though, homeowners with negative equity are unable to refinance in a traditional manner and have therefore turned to options like the Home Affordable Refinance Program or in a few cases there have been some who have pursued the FHA’s short refinance program. The severity, though, of a homeowner’s negative equity situation will heavily depend on what options are available, as there are some servicers who can do very little for homeowners at the present time.
Also, homeowners who can afford their mortgage payment are finding that they may have fewer opportunities for affordability, as many of these homeowners are looking for principal reductions and, depending on their mortgage servicer, these options may not be widely available. It’s understandable that homeowners who are seeing continued decreases in their property value would like their mortgage debt to be dropped to a level that is closer to their home’s current value, but there are some institutions that have stated, in cases where default is not imminent, there may be little assistance available by way of principal forgiveness.
There are, though, some cases where homeowners could turn to their servicer or state housing agency to address negative equity issues, as there are methods for refinancing an underwater home loan that can help homeowners avoid a troublesome mortgage obligation when refinancing through the traditional methods are not possible. Exploring these options may not bring the sought after results that every homeowner hopes to find, but in light of the fact that home prices do continue to fall in major areas of the nation, homeowners should be prepared for any issues related to their ability to make their home loan payment as a result of negative equity or other financial problems.