The current economic crisis has everyone on edge. Banks are collapsing, unemployment is rising, inflation shows signs of rising, and the government is working over-time to stop the bleeding and get the nation’s economy back on its feet — and those efforts are not only costing taxpayers trillions of dollars, but their success is not guaranteed, and will not be felt for a time to come.
One big factor in the financial meltdown is the mortgage implosion. Home prices became wildly overvalued, and when that bubble burst millions of Americans found themselves with enormous mortgages on homes that were worth less than the mortgage itself.
That situation is called being underwater, and for many people with an underwater mortgage — also known as an upside down mortgage — they get so stressed about throwing their money after something that’s worth less and less that they just up and walk away from the home and the mortgage. As part of the government’s efforts to correct the economy, plans are available and in the works to help refinance upside down mortgages.
President Barack Obama has signed legislation creating a fund that will help people pay their mortgages. It will allow people with upside down mortgages to make their payments less painfully, and to hopefully stem off foreclosures.
In addition, a $200 billion dollar fund has been created to help mortgage giants Fannie Mae and Freddie Mac help people with upside down mortgages or underwater mortgages refinance the mortgage loans on their homes.
If you have an upside down mortgage, don’t walk away from your home and your commitment to the mortgage.
There is government help for people with upside down mortgages, and this help could conceivably help you get through your mortgage payments over the next few years until the real estate market comes back, and your home’s value starts to get back to the price that you paid for it.
To learn more about government plans for refinancing upside down mortgages, be sure to contact a mortgage professional or a consumer advocacy group.