Finally, even if you have a conventional, non governmental entity backed, loan, and you are in a hardship position or 'underwater' on you mortgage, many of the lenders and banks will negotiate with you in some form. This is especially true if they are otherwise looking at a loss should the house slip into foreclosure or if you decide to declare bankruptcy.
I hope this helps.
Have you had a Realtor prepare an up to date Comparable Market Analysis? Did you know that home prices are climbing every month? Is the value that you are talking about the assessors value? The assessor's value is always 18 months behind. They use comparable's from 18 months prior to the assessed period of time. If the CMA shows that your home is still valued at less than what you owe, there are several options for you. You can hang tight and let the market continue correcting itself until your value comes back, or you can look into doing a short sale, or you can consider renting your home and buying a new one with the awesome low interest rates and values just starting to rise. Of course, your credit and income/debt ratio would determine if you could do the last option. If you have any questions or I can help in any way, please call me. I would be happy to serve you!
Denise McSheehy, Realtor
If you're making ample income and can easily afford to stay in your home, the answer is "not much". Most folks who are upside down on their mortgage and who still make plenty of income to easily afford their mortgage payments usually end up bringing $ to closing if they like to get out from under their home and sell it. Of course, there are other options like renting yet it usually takes years to get equity back out of the property, and a renter increases risk of damage to the property, etc.
**For homeowners in distressed financial situations who 1) have a verifiable hardship, 2) are insolvent, and 3) owe more than what the home is worth, a homeowner MIGHT qualify for options under the government's HAFA program for non-Freddie and non-Fannie loans (the bank must participate in the program, though, along with many other requirements). Homeowners and banks that enter into this program and who qualify may actually receive cash incentives to sell their home, up to $3,000 for homeowners. The government is essentially lined up behind homeowners to help facilitate these types of deals.
Everyone's situation is different, though, and the requirements are very specific to qualify for HAMP and HAFA programs, so please consult with an expert in these types of transactions if you decide to go this route. Look for Realtors who hold the Certified Distressed Property Expert designation (CDPE), and who are well versed in these types of transactions. They'll let you know your options.
To fully answer your question, an agent would need to ask you about 25 very specific questions upfront (give or take) to let you know what options are truly available to you under the non-Freddie and non-Fannie loans, and if your bank participates in these programs.
I'm a CDPE agent, and my business partner and I have over 16 years combined experience. Feel free to give me a call if you like at: 303-709-8778. Absolutely no obligation and all discussion is confidential.
Keelan McCamey, Realtor, MBA, CDPE