What To Do If Your Mortgage Is Underwater

Real Estate
on February 6, 2013

Do you have a mortgage that is under water? If so, there are are few options available to you if you wish to refinance your loan. Refinancing your loan can lower your monthly payment and bring your mortgage payment more in line with the value of your home. What options are available to you if you want to refinance your home?

Can You Get HARP Relief?

The Home Affordable Refinance Program is a government program that allows you to refinance mortgages that are up to 125 percent higher than the value of the home. To qualify for the loan, you must not currently be in foreclosure and the loan must be held by Fannie Mae or Freddie MAC.

The HAMP Program May Be Able To Help You

If you have missed payments on your mortgage or have payments that are past due, the Home Affordable Modification Program can be of assistance. The difference between the HAMP program and the HARP program is that HAMP is run by the lenders themselves instead of the government. Homeowners should also keep in mind that instead of a complete refinancing of their loan, the lender agrees to let the homeowner make smaller payments for up to 60 months.

Negotiate On Your Own With Your Lender If All Else Fails

Unfortunately, there aren’t many other options available to you if you don’t qualify for either program. Unless your lender is willing to modify your loan, you may be faced with the prospect of starting the foreclosure process. At this point, it may be a good idea to hire an attorney to represent you during talks with your lender. Having legal counsel sit in on these talks could pressure your lender into giving you a modified loan.

Paying more for your mortgage than it is worth is never a good thing. Your only options are to make the mortgage payment each month, hope that you qualify for a loan modification of some sort or prepare for foreclosure. If you wait long enough, your home may regain enough of its value to make it worth paying your current mortgage each month.

Found in: Real Estate
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