What is an "Underwater" Homeowner To Do?

When a homeowner is considered "underwater," it means their current mortgage balance exceeds their actual property value. Being unable to refinance a home mortgage due to lack of property value has been a major problem for many U.S. homeowners the past few years.

HARP, the federal Home Affordable Refinance Program, offers an option to some homeowners finding themselves in this predicament; however, borrowers who have ANY delinquent payments in the past 12 months are not eligible for the program that can allow refinancing as high as 125 percent the homes value.

Other requirements include Fannie Mae or Freddie Mac being the loan owner before or as of May 31, 2009, the loan has not been refinanced under HARP previously, and the current loan-to-value ratio(LTV) is at least 80 percent. Credit scores and individual lender guidelines are also factors when becoming eligible for this program.

What is your first step in finding out if this program is available to you? See if your mortgage is owned by Fannie Mae or Freddie Mac by clicking on both of these look-up tools:

Fannie Mae Look-up Tool 

Freddie Mac Look-up Tool