Recently we have seen decreases in home prices as the Federal Housing Finance Agency reported here at the end of October that the US house price index fell for the month of August, and this has created a situation where more homeowners may be seeing a decline into negative equity and seeking a way to find assistance and relief. Obviously, there are different situations and levels of severity that homeowners are facing when it comes to negative equity problems but recent changes that were announced on October 24 centering around refinancing opportunities for these underwater homeowners have led to some homeowners hoping that help is on the way, but the refinancing opportunities are being questioned by some officials as to how big of a net this aid will cast over homeowners previously unable to benefit from the Home Affordable Refinance Program.
While some officials have stated that changes to the refinance plan will not necessarily help a large number of homeowners, there have been some restrictions removed that previously prevented homeowners from seeing benefits within this underwater refinance initiative and, as mortgage rates remain quite low, there is hope that as home prices have not only continued to fall in some areas but are predicted to do so throughout the remainder of 2011, more homeowners may be able to find affordability on their home loan payment.
Yet, homeowners do need to understand that negative equity problems surrounding the inability to meet a mortgage payment may have more solutions as homeowners who are struggling to make their mortgage payment might be in a position where their mortgage servicers can help them with the use of certain initiatives such as principal reduction plans, modifications, or even forbearance opportunities that can help prevent foreclosure. What we have seen in the area of demands for refinance opportunities have usually been by homeowners who are in a position where they may be able to afford their mortgage payment but have simply seen a decrease in their equity that is so substantial that they have grown frustrated over their inability to at least find some affordability through refinancing to a lower rate or shorter mortgage terms, in the hopes that they can get out of mortgage debt quicker.
Obviously, refinancing options for underwater homeowners and current programs are in place to help with mortgage payment difficulties that negative equity homeowners face have not been perfect but there are still benefits being seen by some when it comes to offering these plans to homeowners with an underwater home loan, despite the fact that some homeowners have had to resign themselves to short sales or other foreclosure alternatives as a way to transition from their home when they can no longer afford this mortgage debt obligation. Yet, homeowners may want to speak with their servicer to inquire over whether they can qualify for new refinancing options or if homeowners are simply having trouble making the mortgage payment, speaking with housing counselors and representatives from a mortgage servicer can be beneficial in helping homeowners explore what opportunities are available.