Today, one of the nation’s largest banks announced that it has started sending letters to thousands of homeowners in the United States, offering to forgive a portion of the principal balance on their mortgages by an average of $150,000 each. The reduction for qualifying homeowners could amount to monthly savings of up to 35 percent on mortgage payments. The article I read said that they expect that over 200k households in this could qualify for their terms. Their terms are that you have to be underwater in your home. (If you don’t know what that means, it’s when you owe more to the mortgage company than what it’s currently worth.) This happened to thousands upon thousands of homeowners in recent years as the housing industry saw inflated values then came crashing down. People are stuck! I hope that this brings some relief to some. You also had to have been behind in your payments as of this January. I guess that’s to prevent anyone from getting any big ideas of stopping their mortgage payments even if they were squeaking by.
It seems unfair to me, that if you are just squeaking by but still making your payments, that you wouldn’t get this big break. I guess that will be one of the hot topics debated about this decision. Those that didn’t make payments are sort of being rewarded for not doing so. Then again, I would have to assume that most people don’t make mortgage payments because they truly cannot afford to–it’s not just about skipping out.
There is a fairly new program called the MHA program. Making Home Affordable (MHA) is the Obama Administration’s initiative that helps struggling homeowners get mortgage relief through a variety of programs that aid in mortgage modifications, interest rate reductions, refinancing, deferred payment or transitioning out of your home while avoiding foreclosure. On that site they have many tips about asking for a mortgage modification. There is also a toll-free phone number to call for help or advice. If you choose to use a private lender, you can also learn about Aurora loans.
The MHA site also has a great glossary of terms if you’re having trouble navigating the system, as well as some tools to help you understand the net present value of your home. The news reports aren’t as bright and cheery as I’d hope they’d be…all these years later. But I think, slowly but surely, we are starting to dig our way out of this mess. I hope those of you that were/are struggling are starting to find some relief. Good luck!
Wow, that’s great news. Yes, I’m a bit (OK, a lot) ticked that some people are getting a HUGE break, but life is not fair. Instead of griping about it, let’s keep more people in their homes and keep our communities stronger. I think the banks can take this haircut.
Yeah, I would love a $150k break on my mortgage, lol, but it’s for the greater good.