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Staying Afloat: How to Get Underwater Mortgage Assistance

If you’re underwater in your mortgage and are beginning to feel the pressure from a rising tide of financial pressure, you’re not alone. Despite some time having passed since the nation’s real estate bubble burst, believe it or not there are still quite a few homeowners just like you who owe more on their mortgage than their house is actually worth.

If you’re in need of some underwater mortgage assistance, the first thing you should do is evaluate your options. We’ve broken down the top underwater mortgage options to help you make the best decision possible.

Understanding Your Underwater Mortgage Options

Homeowners who are underwater in their mortgage have essentially two choices:

If you’re a borrower who has remained current on your mortgage, has a loan owned by Fannie Mae or Freddie Mac, and owes as much or more than your home is currently worth, you may be eligible to refinance your underwater mortgage using a HARP refinance loan. The HARP program has been extended several times and will now expire on December 31, 2016.

There are many benefits to using HARP. They include:

  • A lower interest rate (i.e. less out-of-pocket costs each month)
  • Lowering your monthly payments
  • Securing a fixed-rate mortgage that won’t change over time
  • Building equity faster — shorter term options may be available
  • Lower closing costs because an appraisal is not usually required

According to, eligibility requirements for HARP refinancing consist of the following:

  • You are current on your mortgage, with no 30-day+ late payments in the last six months and no more than one in the past 12 months.
  • Your home is your primary residence, a one-unit second home or a one- to four-unit investment property.
  • Your loan is owned by Freddie Mac or Fannie Mae. If you aren’t sure, use the Loan Look-up Tool.
  • Your loan was originated on or before May 31, 2009.
  • Your current loan-to-value (LTV) ratio must be greater than 80%.
  • There’s no minimum credit score needed, however certain lenders may require a credit score of at least 620. 

The Home Affordable Modification Program (HAMP) is ideal for borrowers who’ve experienced some hardship, especially if you’ve lost a job and need a little assistance getting back on your feet. If you’re a qualified borrower, HAMP can help you lower your monthly mortgage payments, making them more affordable and sustainable for the long term. HAMP is also set to expire on December 31, 2016.

Benefits of HAMP include:

  • Achieve a more affordable payment by adjusting your interest rate, extending your term and reducing or forbearing your principal.
  • If you owe significantly more than your home is worth (>115 Loan-To-Value), you’re automatically evaluated for principal reduction.
  • Earn up to $10,000 just for making timely payments, which can be used to reduce your principal balance.

You may be eligible for HAMP if you meet the following criteria:

  • Difficulty making your mortgage payments due to financial hardship.
  • Delinquent or in danger of falling behind on your mortgage.
  • You obtained your mortgage on or before January 1, 2009.
  • Your property has not been condemned.
  • You owe up to $729,750 on your primary residence or one- to four-unit rental property

The important thing to remember is that not all mortgage modification programs are created equal, so be sure to read the fine print and speak with your mortgage broker or loan servicer to get all the details.

At Blue Water Mortgage, we have helped countless borrowers figure out how to get out from under their underwater mortgage virtually unscathed. If you’re struggling and need some breathing room, don’t hesitate to contact us to discuss your options. Even if we don’t have the solution, we’re happy to help guide you in finding the right person to talk to or program to consider.

Roger Odoardi

Roger is an owner and licensed Loan Officer at Blue Water Mortgage. He graduated from the University of New Hampshire’s Whittemore School of Business and has been a leader in the mortgage industry for over 20 years. Roger has personally originated over 2500 residential loans and is considered to be in the top 1% of NH Loan Officers by leading national lender United Wholesale Mortgage.