subject: How Owners of Freddie Mac Homes Can Avoid Underwater Mortgage Troubles [print this page] How Owners of Freddie Mac Homes Can Avoid Underwater Mortgage Troubles
People who own Freddie Mac homes, just like other homeowners in the U.S., are not immune to the threat of foreclosure. For homeowners who are facing underwater mortgage problems, the government-supported mortgage giant has made available some options that they can explore to retain their properties and solve their ownership problems.
What Are Underwater Mortgages?
An underwater mortgage is a situation wherein a homeowner owes debt on the mortgage that is higher than the value of his home. This rarely happens during a homeowner's first mortgage, but is highly possible once he has taken a second or third mortgage. Changing residential property values caused by various factors, including rezoning, can also put a mortgage underwater.
Options Available
There are homeowners who, instead of dealing with the problem, prefer to walk away from the responsibility and leave their homes to foreclosure. For some of them, it is not worth pursuing any option since they expect to lose their property and the money they put down on it no matter what they do.
This option though, is not advisable. In most cases, lenders can still sue borrowers even after the property has been foreclosed and sold, particularly if the money derived from the sale is less than the amount owed by the borrower to the lender.
For owners of Freddie Mac homes, there are ways by which they can retain their property and deal with their mortgage debt. Mortgage refinancing programs are offered to homeowners who have properties guaranteed by Freddie Mac. These programs could provide them with ways to pay their debt and retain ownership of their houses. Those who have good credit standing will always have a better chance of getting refinancing and get themselves out of the underwater problem.
Short sales, or the selling of the property for a price that is less than its actual value, is another option that they can explore. There are also instances when Freddie Mac allows principal reductions to homeowners' mortgages just so they can pay their debts and keep their homes.
Owners of Freddie Mac homes should never walk away from their properties when faced with the problem of underwater mortgage. They should seek the help of the mortgage firm and explore alternatives to pay off their debts and keep their properties.
