Refinancing “underwater” mortgages: more plans being considered

There are about 10 million homes whose mortgage balances exceed the value of the house and land.  About half of these underwater mortgages are owned or insured by Fannie Mae or Freddie Mac, the taxpayer-supported mortgage giants.

In 2011, the government sponsored a program that allowed borrowers whose mortgages were underwater and owned or insured by Fannie or Freddie to refinance so they could take advantage of historically low mortgage rates.  So far about 360,000 of these borrowers have taken advantage of the program.

If you have an underwater mortgage owned or insured by Fannie or Freddie you should be looking into this.  It could save you a lot of money.  You can check to see if you qualify at the Making Home Affordable site set up by the Federal Government.

If your house is underwater, and your loan is not owned or insured by Fannie or Freddie, the administration is considering ways to let you into a similar program.  Different plans are under consideration but one would allow anyone whose payments are current and whose mortgage is “deeply” underwater to refinance through the Home Affordable Mortgage program (HAMP).  This might benefit nearly a million homeowners and save them an average of $2,600 a year.

If your house is underwater and you do not qualify for the existing program, let your Congressman and Senators know that you are interested to see a program that helps people in your situation put into effect.

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