Underwater Mortgages And Solutions To Negative Equity For Homeowners–Help For Homeowners Amid Decreased Prices

Underwater mortgages have become even more of a problem in recent months, as it was reported here in June that the first quarter of 2011 saw a substantial decrease in home prices, and as there have been negative outlooks here in the past weeks of the future of home prices, many homeowners are still looking for solutions to their negative equity problems or may simply be in a position where they feel there is no way to recoup their losses and may look for a way to escape their current home predicament. Yet, what homeowners must understand is that men and women who are seeing these decreases, which according to some sources have seen decreased that averaged over 50% or more, are not going to necessarily find a way to regain this value at the present time.

When it comes to underwater mortgage assistance, many homeowners are in a position where they want to stop decreases in their home prices but are obviously in a position where that can not be accomplished in the current housing market, and many feel that factors like unemployment are one of the heavy anchors that is also pulling down home prices due to high levels of foreclosures and low levels of homeowners buying up properties that are sitting empty. Yet, homeowners feel that this problem of decreased equity could be solved through assistance plans and options like principal reductions on their mortgage.

Some programs have also been implemented to help homeowners find underwater refinancing options when the general affordability is the problem, but it needs to be known that consumers who are looking strictly to get a principal reduction on their mortgage, rather than those who are in a position where a mortgage principal forgiveness coupled with foreclosure prevention efforts may be available will find that banks view these issues in an entirely different manner, in many cases.

Consumers are able to take advantage of programs like the Home Affordable Foreclosure Alternatives initiative, the FHA’s short refinance program, or even Hardest Hit Fund plans in certain states, even though some of these plans have seen lackluster results. Yet, banks are, in many cases, of the mind that homeowners who simply want a mortgage principal reduction but can pay their mortgage payment are those who will unlikely find the aid they seek, however there are some banks that are working with homeowners in this capacity.

What it comes down to is that if homeowners are having problems with making their mortgage payment and run the risk of defaulting or even facing foreclosure, options are available to those in situations where these problems can be corrected or even prevented, but when homeowners are seeking only a mortgage principal reduction as a way to recoup losses to their investment, talking with a servicer may provide answers as to whether there are such options available, but again it must be remembered that not all banks are even considering principal forgiveness for homeowners who can afford to pay their mortgage.