With recent data showing that almost 11 million Americans have an underwater mortgage, many homeowners are weighing their options to fix the situation. Should they leave? Seek a mortgage modification? Walk away? Of course there are no easy solutions to an underwater mortgage, but there are various options for those who owe more on their mortgage than their home is worth. By weighing the options available, homeowners can make the decision that is best for them.

What to Do If Your Mortgage is Underwater

If you have an underwater mortgage, it’s crucial to weigh your options carefully. By looking at the various actions you can take, you’ll be able to follow the strategy that’s best for your situation. Some of the best ways to deal with an underwater mortgage include:

Refinance. If you have an underwater mortgage, you might not be able to get a traditional refinance. However, the Home Affordable Refinance Program is specifically designed to help those with an underwater mortgage with loans backed by Fannie Mae or Freddie Mac. A refinance will give you more favorable terms as the value of your home hopefully improves over time.
Foreclosure or bankruptcy. Deciding to walk away from your underwater mortgage is basically the same thing as a foreclosure. This drastic action is typically only reserved for those who don’t see themselves coming out of the situation financially due to their underwater mortgage. If you decide to walk away, be sure to meet with a foreclosure lawyer to minimize the impact on your credit score wherever possible. A foreclosure lawyer will help ensure that all legal responsibilities are fulfilled.
On the other hand, bankruptcy doesn’t erase mortgage debt. Instead, it gives you breathing room and eliminates other debt so that you can focus on covering your mortgage. Similar to a foreclosure lawyer, bankruptcy attorneys can help you navigate the bankruptcy code and other complex financial considerations.
Stay and pay. Be sure that the situation is right for you. Can you see your home’s value eventually recovering? And can you afford to stay and keep paying your mortgage not just for the next few months, but the next few years as well? If so, have your home reassessed and take advantage of lower property taxes.

Even with the recovery of the housing market, many homeowners are still financially struggling with their mortgage payments. Of course, homeowners who are underwater with their mortgages are fighting to avoid a foreclosure, but with so many options available, it can be difficult to make a proper decision. Furthermore, foreclosure law and predatory lending make this a difficult market for struggling homeowners. For those seeking to avoid a foreclosure, knowing the most popular mortgage debt solutions provides many options moving forward.

Mortgage Debt Solutions in 2013

Mortgage debt solutions in 2013 provide a vast variety of options for homeowners. Working with a bankruptcy or foreclosure attorney can help homeowners decide which of the following solutions is best for them.

1. Mortgage modification. This is a mutual agreement where one or more terms concerning the repayment of the loan are modified. To qualify, borrowers must be able to verify their financial ability to repay as well as make the case as to why the terms must be changed.
2. Refinancing. A homeowner with good credit and a good history of payment can refinance the property and take advantage of lower interest rate possibilities.
3. Reinstatement. This solution is only available for homeowners who were late on payments because of a temporary situation. If you were late on a payment, you can reinstate the loan with the previous amount due with any late fees by a date that you and your lender agree upon.
4. Repayment plan. If you’ve missed mortgage payments, negotiating with your lender can help you make up missed payments over time.
5. Forbearance. One of the biggest considerations of forbearance is that it’s a temporary agreement until permanent terms can be agreed upon. However, this allows homeowners a period of time to reestablish their finances.

Many homeowners purchase their homes when they’re in their mid 20′s or 30′s and spend anywhere between 15 to 30 years repaying their home loans. Since most new homeowners are so young, they’re generally healthy and professionally growing, so mortgage payments are manageable. However, unexpected life events can take the life of even a healthy individual. So what happens to outstanding mortgage debt if you die before it’s repaid?

Mortgage and Estate Plan Considerations

Fortunately, no matter how large or minuscule your remaining balance might be, your outstanding mortgage debt won’t be passed to your family members if you die. However, the only exception is if you’re married and the house is owned jointly. If this is the case, it’s likely that your spouse is the co-signer, who would then be responsible for the rest of the payment. A life insurance policy that pays immediately upon your death can protect your spouse from having to pay off the remainder of the mortgage single-handedly. An unprotected spouse will be left with the mortgage debt and may have to sell the home to satisfy the debt.

However, if you’re married and you own the home alone, it’s important to have an estate plan. Without the estate plan, your spouse and family members could lose the home after you pass. For older homeowners, there are a few considerations to take to protect their spouses and loved ones.

Establish a trust. A land trust or revocable trust establishes a process of who will receive the property should you pass.
Sell or give the home to your children. By doing this, older citizens can ensure that their family has the home after their death.
Include the home in your deed. While signing over the deed doesn’t change mortgage considerations, it means that your kids can avoid probate. However, this is dangerous because now the property is subject to your kids’ liability. In other words, if you sign over the deed to your home and your child gets sued, your property could be at stake.
Write a will. Including the property in the will won’t prevent it from going through probate, but it’s better than no written documentation at all.

Mortgage fraud hurts everyone in the housing industry, from the lending institutions all the way to the homeowner. After the housing bubble burst and there was an increase in foreclosures, mortgage fraud schemes increased as well. These scammers poised themselves to take advantage of those struggling with mortgage debt.

Mortgage fraud can take many forms including:

· “Builder-bailout,” where developers discharge excess inventory through financial dishonesty
· Rescue fraud, where homeowners are tricked into signing away the deed to their home
· Identity theft

Stay Alert for Mortgage Fraud

If you are struggling with debt and are looking for help to get back on track with your mortgage, remember these tips to avoid mortgage fraud.

1. Never sign a blank document or a document that has unspecified blanks. Any time you sign a legal document, you want to ensure that all of the terms and conditions are clearly spelled out for both parties. Blanks in the document can be used to change the terms once it’s signed.
2. Use referrals. Trusting referrals from family, friends, or local sources ensures that you’re working with a trusted source that others have had a good experience with. They can help you settle your debt and you won’t have to worry about mortgage fraud.
3. Educate yourself to the types of mortgage fraud. Two of the most common scams are Reverse Mortgage Scams and Loan Modification Scams. If you know the most common types of mortgage fraud in your region, you’ll know to be extra cautious as you approach those opportunities.

It’s important to follow these tips, because becoming a victim of mortgage fraud can incur more debt. Victims lose time, money, and aren’t always guaranteed the opportunity to recuperate what they lost from the scam.

Homeowners who are anxious to lower their mortgage rates might be tempted to refinance their loans as quickly as possible. However, there are an increasing number of homeowners complaining about the financial pitfalls of refinancing. While refinancing can help many homeowners save money and quickly eliminate their mortgage, this option isn’t for everyone. If the situation is fitting, it can save substantial money on a monthly basis. However, the financial benefit isn’t always there and sometimes it’s the brokers and lenders who benefit instead.

How to Refinance Housing Debt

Refinancing mortgage debt is an appealing option. However, homeowners must adamantly research the upfront fees associated with transactions, closing costs, interest rates, and much more. Also be sure to discuss what the penalties are should you fall behind on payments again.

To successfully refinance the mortgage:

· Know why you’re refinancing. Knowing the reasons behind refinancing will help you choose the option that is best for your situation. For instance, you can extend the remaining loan term or seek to utilize your home’s equity instead. Other options include reducing the term of the mortgage and switching to a fixed-rate mortgage.
· Analyze your credit score. Since credit rating is one of the largest determinants of your mortgage rate, be sure to understand your credit score. If it needs to be improved, then be sure to watch your debt and keep spending in check. Eliminating debt not only helps your credit score, but your mortgage as well.
· Check out the market place. Poorly planning how to refinance has actually caused many homeowners to slip back into debt. To avoid this, be sure to shop, compare, and negotiate. Obtain information from several key lenders and go beyond the basics such as monthly payments or interest rates. Drill them for loan terms, the type of loan, and all the information you can so that you can compare this information from previous lenders. By following this strategy, you will be in safer shape for refinancing and eliminating debt.

Negotiating the world of mortgage debt can seem like an incredibly complex prospect for anyone dealing with it. But there is hope for those suffering from the problems associated with mortgage debt.

Dealing with Mortgage Debt

If you haven’t been able to keep up with your mortgage payments, you’ll already be building up debt. Without a reliable method of paying off this debt, you could risk foreclosure or other negative financial impacts of mortgage debt.

If you do have the ability, an easy way to clear out a mortgage debt is to make an extra payment on top of your usual monthly payment. Check your monthly household budget and see if there are any cuts you can make to free up money for these extra mortgage payments.

There are negotiation methods you could possibly undertake with your lender as well. One such method is capitalizing your arrears, in which what you owe is spread out over the remaining term of the mortgage. There’s also the option of negotiating a longer-term for your mortgage, but you might likely end up spending more over a longer term due to accrued interest.

If your mortgage is an endowment mortgage, there is the possibility of surrendering your endowment policy. This is a very risky proposition, however, although it will get you a lump sum of cash. The downside to selling your endowments is that you need to likely find an alternative life insurance provider, as well as assess if there are penalties for giving up the endowment early. You should consult with a well-versed financial expert before considering this option.

Mortgage loan interest rates have continued to hover around all time lows for the last year or more. With so many people looking to lower their payments to stay out of mortgage debt, refinancing can be a great solution. In general, there are a few tips for making refinancing successful.

The Right Step

If you are wanting to simply avoid foreclosure you may need to consider whether refinancing is the right option. Refinancing can lower your monthly payment, but can also cost you money out of pocket to obtain the new loan. One of the most overlooked aspects of refinancing is considering your “break even point”, which is the point at which the savings from refinancing is cancelled out by the costs associated with taking out the new loan. The general rule of thumb is that you should only refinance if the interest rate will be at least 1 percentage point or  more lower than what you have on the current loan. This ensures that your savings over time outweighs the costs to take out the new loan.

Also, shop around for the best refinancing offer. Many lenders will boast “no closing cost” offers, but there is no such thing as a free loan. Typically, these offers refer to the fact that there are no upfront fees for refinancing, meaning that you won’t have to pay cash for closing the loan. Instead, the fees will be rolled into the loan or be compensated by a subsequent increase in interest rate, increasing your payment each month. It is important that you really understand the details of the new loan you are considering before refinancing. When you refinance you are creating an entirely new loan, which typically comes with a reset on your loan term. Therefore, if you have paid 10 years towards your current 30 year loan, those years will vanish and you will restart your refinanced 30 year loan at year one.

Mortgage loans come in many forms from conventional to FHA and VA loans. Each has their own set of eligibility standards and benefits, and each has their own drawbacks. When it comes to mortgage debt problems, the type of loan you carry could be the difference in finding help to avoid foreclosure.

Detailed Differences

A conventional loan is one that is not backed by the government, rather is secured solely on your personal credit and guarantee. A big benefit of a conventional loan is that they are free of some of the requirements and stipulations of a FHA or VA loan. However, with freedom comes more responsibility and defaulting on a conventional loan can be costly. Since the lender is risking much more by having only your personal guarantee, missing a payment on a conventional loan could lead you down a path to foreclosure much faster. Finding approval for a loan modification or forbearance agreement can be more challenging than in a FHA or VA loan.

A FHA loan is one that is backed by the government, which essentially makes approving the loan less risky for the lender. People often favor these loans because of their lower down payment requirement and, often, better interest rate offers. Many FHA loans also come with more flexibility in payment and fewer fees associated with changing loan conditions. The flexibility found in a FHA loan is associated with the reason that finding help for mortgage debt troubles under a FHA loan can be easier than in a conventional.  Typically, more of the government programs for mortgage debt relief are more applicable to FHA loans.

For  many Americans, the mortgage interest tax deduction is important for maintaining fiscal health each year. Accounting for nearly 35% of most people’s total itemized deductions, the threat of losing this deduction could seriously impact the future of many families. With the current plan expiring at the end of the year, time is running out for the White House to decide how to proceed.

Protecting Pockets

Regardless of political affiliation, both parties had plans to keep the mortgage interest deduction around for another few years. Thankfully, this is great news for many homeowners and the fate of the housing industry in terms of potential for continued recovery as mortgage debt rates are steadily declining. However, the deduction is likely to see some noteworthy changes in the coming year.

Currently, the deduction allows for homeowners to reduce their taxable income by the amount of interest paid on the mortgage loan. The interest deduction is capped at a $1 million home value, and only applies to principal and second homes, and not on multiple investment properties.

There are several proposed plans for revisions of the deduction, which include items such as:

• A cap of $500,000 home value
• Limiting the deduction to primary residences only
• An overall  limit of $25,000 in savings
• Disqualifying taxpayers who earn more than $250,000 annually from eligibility to claim the deduction

There is much to be decided in how the future of the mortgage interest deduction will play out, but one thing is clear; it will be around for another few years. The reason is that nearly everyone agrees that the deduction is important to the stability of the American housing market and economy.

For many Americans, foreclosure comes as the result of unexpected financial hardships. For others, foreclosure can be a result of getting in over one’s head in a mortgage loan. Even those who may never experience the threat of mortgage debt, getting the best deal on a mortgage is always a good thing. Now, a new iPad app can help in the search for the right mortgage.

Smart and Savvy

One thing technology has done is made life easier in many aspects. Smartphones and devices like the iPad are specifically designed to help users streamline processes and making learning easier than ever. The popular real estate website Zillow has released its first ever iPad application designed with home buyers in mind.

This new application will help consumers looking for mortgages evaluate their mortgage choices, search for homes in their area and obtain tips about getting the best deal from a lender. Already the owner to 15 mobile apps of a similar nature, the Zillow iPad application is supposed to bridge the gap between searching for real estate and preparing for the mortgage application process. The app even features a Mortgage Marketplace App to help put buyers in touch with reputable lenders in their area.