Freddie Mac, Fannie Mae and other government agencies such as HUD have mortgage relief programs to help the middle class.
FMERR and HIRO are suspended, but Refi Possible and RefiNow are available.
Upside-down mortgage relief comes in a few forms. Which is best for you depends on if you want to stay in your home or walk away.
If you are underwater and have negative equity you can work with your bank to modify the loan or reduce the principal. You probably can’t refinance.
If its best to leave your home then you should consider a short sale rather than let the bank foreclose. Bankruptcy is also a better alternative.
The Mortgage Forgiveness Debt Relief Act excludes qualified loan forgiveness.
The IRS does count forgiven liabilities as taxable income, but you can avoid these with proper tax planning.
The government has greatly reduced their mortgage loan modification programs in recent years.
HARP and FMERR are no longer available, but Fannie Mae’s HLOR is still available as well the Flex Modification. Your lender probably also has its own programs that you should consider.
What happens when you modify your mortgage? It will affect your mortgage, may stop foreclosure, and will affect your ability to get loans later on.
Therefore, you should only apply to do this if you are in a serious financial crisis that will cause you to lose your home.
While the government has stopped many programs like HARP, Freddie Mae and Freddie Mac still have home refinance programs to help people underwater on their mortgages.
Fannie Mae and Freddie Mac each have programs to help. Also, banks have loan refinancing and restructuring programs.