Something to keep an eye on. Check out this Article on housingwire.com, which was forwarded to me by my title insurance company (copy here: News Brief – August 2011). One of the largest private mortgage insurers, PMI Group, is starting a program that will run in “Select Markets”, where they actually offer cash incentives to homeowners who are in negative equity situations (when you owe more on your home than it is worth). Basically, the program will offer cash incentives forgiving from 10% – 30% of the unpaid prinicpal balance on the mortgage loan, in exchange for 36 to 60 months of timely payments.
This is the first such program I have heard of, and it could help a lot of people, as there are MANY hoemowners stuck owing more than their home is worth, due to depleting home values.
As yet, I do not know what the “select markets” are, and I am trying to find out more (the process, contact info, etc). But if this takes off, we could see more of these in future, which is not a bad thing.