Here in the month of June there are homeowners who are still struggling in terms of the property value of their home, and since there have been recent decreases reported in various areas across the nation, more homeowners are finding themselves in an underwater situation or may have seen the severity of their underwater home loan predicament become much worse over the recent weeks. However, homeowners are still in a position to take advantage of programs that may help them find more affordable options on their mortgage by allowing them to refinance even when negative equity is a problem. One of the more popular forms of underwater refinancing assistance comes from the Home Affordable Refinance Program, which is still available here in June of 2011, as there were extensions made for this particular program as a result of continued property value problems throughout this year.
Homeowners are obviously frustrated when they find that they are paying on a mortgage that is worth much more than the property associated with this and some have gone so far as to walk away from their home loan, but this can wreak havoc in the financial life of the consumer. Obviously, men and women are in different positions in terms of their mortgage situation and the severity of their negative equity, yet many homeowners are also in a position where their negative equity has either made their home loan payment difficult to meet or some simply see their home as an investment on which they have lost out due to property devaluation.
Recent decreases in mortgage interest rates have also created a frustrating situation for these homeowners as traditional refinancing routes may not be available, which had been able to offer some homeowners more affordable payments and lower rates as well. However, homeowners who are in one of the two situations previously mentioned, will find that those who are having difficulty making their mortgage payment and run the risk of defaulting could find assistance through programs like HARP but in instances where a homeowner only needs a principal reduction, this could be more difficult to come by.
Contacting one’s mortgage servicer is the first step to addressing negative equity issues, but there are also housing counselors from organizations like HOPE NOW or the Department of Housing and Urban Development that can guide homeowners through options available from the federal Making Home Affordable initiative. Yet, some banks have stated specifically that if a homeowner does not run the risk of defaulting, negative equity payments will not be reduced or mortgage principles will not be lowered if a homeowner can pay on their mortgage obligation at the present time. Many have grown irritates over these stances that some banks have taken, as there are some financial institutions that will work to offer mortgage principal forgiveness in drastic situations of negative equity, but again, homeowners who are specifically targeted by HARP are those having affordability issues.
While underwater refinancing is not always available though, homeowners may want to explore these options directly from their servicer or from programs like the Hardest Hit Fund in certain areas, as finding affordability on a home with negative equity should be the main priority of anyone with an underwater mortgage, rather than looking for ways to simply decrease their mortgage principal for the purposes of potentially selling their home for a profit later.