Some homeowners may have seen slight increases in their property value during the second quarter of 2011 but there are some reports that indicate home prices, even those which may have inched up over the past months, are still lower than levels we saw last year in certain areas of the housing market. What this may translate to is a continued need for some homeowners to address underwater equity issues which could potentially help them deal with their negative equity problem in cases where making a home loan payment has become difficult. It’s no secret that homeowners have had trouble in some areas when it comes to not only paying their mortgage but dealing with decreases in their property value, but when it comes to the programs that are available to help homeowners it’s important for individuals facing an underwater home loan to understand who these programs are meant to help.
Homeowners who may have problems paying their mortgage as a result of being in a negative equity situation or who are potentially in a position where a decrease in their mortgage principle could make their home loan mortgage affordable are usually those who are targeted by these negative equity assistance plans. Homeowners who are simply facing negative equity as a result of devaluation in their area but are still able to afford their mortgage payment may not have as many opportunities, but there are some principal reduction plans that are in place which may be helpful for some homeowners depending on their situation and mortgage servicer.
For homeowners who are current on their home loan payments, there are some banks that are rewarding these individuals who are facing in negative equity situation but continuing to pay their home loan, as there are still some homeowners who are considering simply strategically defaulting despite the fact that they can pay their mortgage. While this practice may have slowed quite considerably compared to other times over the past year or so, there are still banks that may reward homeowners for continuing to keep their underwater home loan payment current, as some of these institutions understand that homeowners are in a difficult situation.
However, homeowners need to speak with their mortgage servicer to make sure that any of these plans may be available, simply because there are certain financial institutions that will not offer a homeowner who is in a financial position to honor their mortgage obligation the opportunity to essentially have a percentage of their equity restored through the use of a principal forgiveness option. While principal reduction programs and even underwater refinancing options may be available for some, this is usually only used by services as a way to help these homeowners continue to make their home on payment when foreclosure may be avoided in these cases.
Yet, even homeowners who are facing financial distress may not be able to save their home as we have seen an increase in short sales, as an example, for a homeowners who are in a negative equity position but are unable to find a solution that will make their mortgage more affordable. Essentially, homeowners who are in a position where they can pay their mortgage may have fewer options but they could contact their servicer, housing counseling agencies, or even their state housing agency to inquire about these programs that are currently available since there may be certain factors specific to their situation that could qualify them for some form of assistance. Homeowners need to remember though, negative equity assistance is no guarantee and simply because a homeowner faces an underwater situation does not mean they qualify for this type of aid.