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Homeowners with “Upside Down” Mortgages: No Foreclosure Help Available

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By : Cassiano Travareli    99 or more times read
Millions of homeowners are struggling to meet their mortgage obligations and exploring solutions that could help them keep foreclosure at bay. Sadly, it has become more and more difficult for these homeowners since most of them have “upside down” mortgage and basically, disqualifies them from qualifying for most bailout plans.

For instance, the refinancing program “Save the Dream” of Michigan Governor Jennifer Granholm was launched last April to provide assistance to troubled borrowers. Out of the 135 calls received, only four were qualified.

Such dismal statistics is certainly frustrating for both homeowners and housing advocates. Many are crossing their fingers for Hope for Homeowners, the latest government offering to meet the public’s expectations.

Another federal program, FHA Secure from the US Department of Housing and Urban Development, was considered to be a failure since most of the applicants did not qualify. The requirements were simply too strict and too specific, almost automatically disqualifying homeowners who require assistance the most.

Two reasons can be cited for the disqualification of majority of the homeowners. One is having no equity left on their properties and another is missing too many mortgage payments. In most cases, zero or even negative equity means owing more in mortgage debt than what the property is currently valued at.

For the government programs to work, housing counselors and mortgage brokers believe that lenders require more assistance in the form of staff in order to process more work out plans. The good news is that most lenders have finally looked at the problem at a different light and have become more willing to negotiate.

Aside from this, it is also vital that mortgage guidelines become more reasonable, allowing more time for homeowners to work out their mortgage payment problems especially if they have good credit scores.

In some states, new laws that will give troubled borrowers as much as 90 days to negotiate with their lenders before a foreclosure case can be filed, have been approved.
Cassiano Travareli has been educated in the finer points of the foreclosures market over 5 years.

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