What Is an Underwater Mortgage?

Over the last few years millions of Americans have lost their home equity and now find their underwater mortgages are difficult to refinance. An “underwater mortgage” is a term used to describe when a borrower has a mortgage that is greater than their home value.

In other words, if they sold their home today, they would owe the bank money because the proceeds from selling their house would not cover the lien that is owned on their property.

Many homeowners are suffering from payments they can no longer afford, but because underwater mortgages have been preventing them from refinancing into a more affordable loan payment. BD Nationwide can help you find lenders that specialize in subprime, hard-money loans and equity loans for bad credit.

There are millions of homeowners in the U.S. that have great credit, but they find themselves stuck in a high rate ARM because of their underwater mortgage loan that is preventing them from qualifying for a refinance loan that guarantees a lower fixed interest rate.

BD Nationwide can match you with lenders that offer several underwater mortgage refinance solutions for borrowers that have a good mortgage payment history but find themselves stuck with an outstanding balance that is more than the value of their house.

The window of opportunity to refinance an underwater mortgage will be closing soon, so talk to our HARP lenders today and lock into a once in a lifetime loan. If you haven’t been following the news, high LTV mortgage rates remain near record levels.

The Home Affordable Refinance has been extended through 2018 for homeowners that have liens owned by Fannie Mae or Freddie Mac. Find out if you meet the high LTV or HELOC requirements now.

Consider refinancing your underwater loan while there are low rate refinance programs available: Now you can eliminate your underwater mortgage by refinancing with the Home Affordable Refinance Program! Get more info on fixed rates that could potentially save you money!

Home Affordable Refinance Program – This government program enables borrowers who have a Fannie Mae or Freddie Mac owned mortgage to refinance their first mortgage balance regardless of the loan to value. HARP 3.0 has focused the program to provide solutions for consumers that have an upside down loan attached to their primary residence. This unique 100% mortgage-refinance program will not be available forever. Check rates on the HARP mortgage plan now.

Fannie Mae DU Refinance Plus – Fannie Mae offered a no equity refinance loan up to 105% loan to value. Borrowers must have a mortgage owned by Fannie Mae and the refinance was only to refinance 1st mortgage liens. This under water mortgage program was the predecessor for the original HARP program.

Emergency Homeowner Loan Program – This government mortgage relief program went a step further than the others, because this FHA Short Refinance program actually lowered the principal mortgage balance to fair market value. This plan was recently replaced by the HARP mortgage program for distressed homeowners suffering with underwater properties.

VA Refinance with any Loan to Value – The VA program is not concerned about loan to value like most traditional lending products. See VA interest rates today.

FHA Refinance at 96.5% LTV – The FHA continues to insure refinancing for qualified borrowers with only 3.5% earned equity in the house. If you already have a FHA lien, they may even approve you for streamline with zero equity. Check the FHA mortgage rates today.

Underwater Loan News: After being bailed out a few years ago, Freddie Mae and Fannie Mae have made significant head-way in their efforts to rebound with few loan defaults.

The two government sponsored enterprises came together with the Obama Administration with a mortgage relief initiative to help borrowers with underwater mortgages to secure a refinance solution that provides a low fixed rate. The second version of the HARP refinance program has been a success this year mostly because the “loan to value” requirements were completely eliminated.

According to Mortgage News Daily, under water mortgage refinance transactions soared last month as more homeowners have applied for a reduced fixed interest rate. Fannie and Freddie closed 420,021 HARP mortgages.

This number rose from approximately 356,000 in July. According to the report, there over 2,945,000 underwater mortgages have been refinanced under the HARP 2.0 last year. According to the FHFA report, the commission estimates that nearly 1 million borrowers will get a lower interest rate through HARP, even though they have an underwater mortgage.