As homeowners continue to struggle with issues related to negative equity on their home, some are unsure of what assistance options are currently still available, as some lenders have implemented certain plans to a greater extent than others, but there are also some specific options that may be open in certain states to help homeowners in an underwater mortgage situation. Obviously, the severity of a homeowner’s negative equity situation could impact what types of aid are available, but it needs to be remembered that not all homeowners will be able to take advantage of programs that may be currently open to help them deal with negative equity.
In the past couple of weeks officials have been making statements that there are proposed plans in the works that may help certain homeowners, particularly those who have seen equity drop on their home, but current plans like the Principal Reduction Alternative initiative and certain state-specific programs may be able to offer homeowners either the forgiveness of a percentage of their mortgage principal or some plans have even offered financing to help homeowners lessen the severity of the amount they owe on their home versus the value they currently see on their property.
This is obviously where homeowners are frustrated as anyone who is paying on a mortgage that is worth substantially more than the home it is attached to gives homeowners a great deal of concern due to the fact that some wonder whether their property value will ever return or if they will be able to sell their home in the future at a profit, like when they retire. There are also some homeowners who simply face discouraging circumstances when they cannot meet their mortgage payment on a negative equity home loan, and thanks to being in this position many have been unable to refinance for more affordable terms on their mortgage, which in other cases may have been the solution to any payment problems they had.
While state programs like the one in California, which was set up through the Hardest Hit Fund, may offer funding to help homeowners in this position, there are some major banks that may offer a principal reduction through the federal PRA initiative or simply as a reward for homeowners who are in a negative equity position but continued to pay on their mortgage. Yet, some homeowners have been seeking out help from the Home Affordable Refinance Program and the FHA short refinance initiative simply because they cannot meet their mortgage payment as it currently stands, however some of these underwater refinancing initiatives have failed to get off the ground and have not helped as many homeowners as they were originally thought to have aided.
As always, homeowners may be able to speak with representatives from their state’s housing agency or housing counselors in their area, but when it comes to looking at what a servicer may particularly offer for homeowners it needs to be understood that not all banks are offering these programs to those facing negative equity issues, but in terms of helping homeowners who are behind on their mortgage payments, there are some available assistance options that may help in this area even if they cannot help homeowners reduce their mortgage principal.