There were mixed results in the housing market in the month of May which brought about some positive news in that there were indications that home prices did inch slightly higher but in major cities it was reported that home prices decreased, which still leads to the conclusion that negative equity and continued devaluation in certain housing markets across the nation are still present problems that homeowners are facing. Understandably, some homeowners may have seen ups and downs in their home price over the past months or even years, but by and large there are still many homeowners who are in a troubling negative equity situation that, despite increases in home prices in some areas, has done little to help them overcome problems related to their underwater mortgage.
Homeowners are asking is whether there are assistance programs still available and if so what type of aid may be available for their specific situation. However, homeowners are seeing some problems in that there are no universal options necessarily available for every homeowner, as is the case with home loan modifications, as some programs are in place that may allow underwater refinancing or principal reductions but may only be available to certain homeowners, like those whose home is either guaranteed or owned by Fannie Mae or Freddie Mac. Of course there are still banks that are offering their homeowners specific forms of aid through a proprietary or federal programs, but again there is no required actions that servicers must take when dealing with negative equity.
For the most part, homeowners are aware of state programs, federal options and even private plans that may be in place in their area or with their particular servicer, but issues have constantly been popping up that may have hindered some homeowners from finding solutions to their negative equity problem. What homeowners are continuing to see is a situation where if they are current on their home loan there may be few options to help them in terms of principle reductions or even mortgage payment reductions, but if a homeowner has found that mortgage payments are difficult to make, there may be limited forgiveness of their mortgage principal or payment reduction opportunities, but certainly some homeowners are not seeing these options on a scale that has reduced their negative equity problem by any substantial amount.
Understandably though, there are some banks that may be able to address homeowner problems specifically, which is one reason officials have prompted homeowners to talk with their servicer if they are facing underwater difficulties, but of course federal programs like the Principal Reduction Alternative initiative and programs from the Hardest Hit Fund may be able to help homeowners find affordability and mortgage principal forgiveness however this does not necessarily mean that every homeowner will qualify.
It’s hoped that even in major cities where these home prices were reportedly down from last year, improvement will soon begin to come, as there are some banks who are making greater efforts to help homeowners who are facing mortgage payment problems, negative equity, or issues related to unemployment as it seems that since there are fewer homebuyers in the market at the present time than banks would like to see, more banks may be willing to work with the homeowner to keep them in their home so that they will simply not have a property sitting empty in the market.