Number of Underwater Homes Shrinking

underwater homes improving

Underwater homes are gaining equity and improving the housing markets in many areas.

An article recently completed for the McFarlin Law, LLP website summarized the findings of an equity report published by CoreLogic, a housing tracker firm.  The report indicated that just over three and a half percent of Orange County homes with a mortgage were valued less than was owed during the second quarter of this year, otherwise known as underwater homes.  In 2009, the same statistic had risen to more than one hundred and thirty thousand homes in Orange County.  Alternatively, the newest report specifies that only nineteen thousand eight hundred and forty homes can be termed as underwater homes in the same locale.

As a result, the article notes that the report indicates that the state of the housing market in the area is certainly improving.  Specifically, eighty five percent of underwater homes have shown to regain equity over the course of the last five years.  Reasons for the increase in equity have varied; some homes regained equity because of an increase in the home value, while others simply increased in equity due to being foreclosed or being sold at a loss.

Despite the fact that the report generally brought good news to homeowners of Orange County, the article still sought to provide possible opportunities where homeowners could potentially face losing their homes.  It can be something as simple as an illness or the loss of steady employment that results in a family being uprooted.  If this happens, the article first cautions facing the problem head-on; ignoring statements and letters from the lender will not make the problem evaporate.  Having a back-up plan can also be reassuring, according to the article, which provides several programs that offer loan modifications and government housing possibilities that can serve as a solution to losing a house in an emergency situation.  The Home Affordable Modification Program, otherwise known as HAMP, can help the homeowner lower the monthly mortgage payment to thirty one percent of the individual’s verified monthly gross.  Principal Reduction Alternative, otherwise known as PRA, specifically works to address those individuals who own an underwater home; the program allows homeowners who owe more than the home is worth to reduce the amount they owe.  For those homeowners who already have a second mortgage on their property, the Second Lien Modification Program, otherwise known as 2MP, allows certain homeowners to modify their second mortgage.  Finally, The Home Affordable Refinance Program, otherwise known as HARP, can help homeowners refinance into a more stable mortgage.