Underwater Mortgages

With millions of foreclosures threatening to further the already weakened U.S. economy, homeowners are finding alternative tactics to delay the foreclosure of their homes. By completing the proper paperwork to request the bank to produce your original mortgage document, foreclosure proceedings can be delayed for weeks or even months, providing a perfect window for reworking the terms of your mortgage rate and keeping your home.

Why Producing the Note Can be Effective

The reason why produce the note is an effective battle cry is because that simple document is part of the original cause for the entire mortgage meltdown. During the housing market boom, mortgages were bundled, sold and bought as high yielding securities for investors. Most of the original paperwork signed by the homeowner is now in cold storage, or in some cases destroyed completely.

The United States legal system provides rights for both the plaintiff and defendant in legal matters. Once a homeowner defaults on a loan and a bank wants to seize the property, the matter of foreclosure goes through the legal system.

The request for asking your bank to produce the note requires them to prove they are the party legally entitled to sue you. Only the original mortgage note will officially establish you owe the debt. If the lender is not challenged to provide the letter, the foreclosure will proceed as scheduled.

If at anytime you believe you are in jeopardy of losing your home to foreclosure, make sure to get advice from a HUD housing counselor or try to speak to the bank directly about renegotiating the terms of your loan. If however, the foreclosure is already in process, the produce the note strategy could provide you with the time needed to explore other options.

If you have an underwater mortgage and are at a loss for how to save your home, you should know there are options out there for you. Some options are designed for specific homeowners, but if you're persistent in your decision to avoid foreclosure, you will find something that works for you.

To help you better understand on how you can help handle your underwater mortgage, here are some options that you should consider taking advantage of.

Talk to Your Lender

The first thing anyone would suggest you do is contact your lender to see if you can come up with ideas together for how to save your home. If you have an underwater mortgage, you may be able to ask for some options to at least help you get you caught back up. The lending company's first resort is not to kick you out of your home, so if you at least show your interest in wanting to rectify the situation, you might be surprised by the results you get.

Take Advantage of Programs

In addition to the proposed housing plan that will help "at-risk" homeowners modify their mortgages through refinancing options, as well as loan modifications, there are programs presented by FHA and Congress that may be able to help your underwater mortgage stay afloat. FHA has two programs that can help homeowners: FHA Secure and Hope for Homeowners. FHA Secure offers subprime borrowers with non-FHA mortgages an opportunity to refinance into FHA-insured mortgages. Hope for Homeowners helps borrowers keep their houses by helping them to refinance into fixed-rate loans.

Congress' program is called the Streamlined Modification Program. It helps you reduce your interest rates and/or stretches out your loan terms so that your payments will be more affordable.

Sell Your Home

If you're at the point that you would rather not keep your house, you can try a short sale, which allows you to sell your property for less than the amount you owe. Also, you can sign your deed back over to the lending company in what's called a deed-in-lieu of foreclosure. It relinquishes your responsibility to pay the mortgage; however, it carries the same credit repercussions as a regular foreclosure.

If you're truly interested in how to save your home if you're in danger of foreclosure due to an underwater mortgage, these suggestions should be able to give you a great start.

Holding an underwater mortgage can easily leave you in a position where youre looking for help with saving your home; luckily there is help out there. The key is to know where to look and which help is actually for you. To get a better idea of what's out there, let's take a look at some options.

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