Announced by the Housing and Urban Development (HUD), August 6, 2010 in Washington DC looks to offer 10% principal reductions to non FHA borrowers who are currently "underwater" in value of their homes. Great in theory but I have yet too see many Investors actually agree to reduce principal in any shape or form and I have been in this industry for over 3 years! Is it more political agenda coming from the current White House Administration?
Loan modifications on the other hand have helped thousands of struggling homeowners in reducing mortgage payments, but as we have waddled through the subprime home loans and are now seeing more current home owners requesting assistance, you have to wonder if the system is just overwhelmed with applicants who in all honesty need a PRINCIPAL REDUCTION. With the Federal Housing Administration (FHA) announcing also the new FHA2LP soon to be released to lenders and services this coming fall. Investors are going to have to start SERIOUSLY looking at reducing principals for homeowners in order to keep them in their homes.  An article posted on Yahoo financial paints all to familiar what is currently going on in today's housing market.
http://finance.yahoo.com/news/US-homes-lost-to-foreclosure-apf-1876677328.html?x=0
In short always ask your servicing lender/lender who your Investor is this will help you fight for a principal reduction and give you some insight as to what the possibilities are in getting a principal reduction or loan modification. It is a tedious process and more so with larger banks like Bank of America, Chase, and Wachovia.
View this post on my blog: http://www.federalpersonalloan.com/federal-personal-loan/federal-housing-administration-principal-reduction-program-for-mortgages-a-joke.html
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