Refinancing for Underwater Homes: New HUD Program Pitches In SPONSORSHIP

Many underwater homeowners-those who owe more on their home than it is currently worth-feel stuck. They can't sell without taking a major loss, and they often can't refinance because the appraiser's report doesn't past muster. If they want to take advantage of some mortgage modification programs, they're often told they need to be behind in their mortgage first.

But what if they are current on their mortgage? Well, the government has a new plan for these homeowners.

Under a new U.S. Department of Housing and Urban Development (HUD) program, homeowners who are current on their loans can reduce their hefty loan-to-value mortgage debt by 10 percent, if they qualify and if their lender approves. This is big news, especially for homeowners in the five hardest-hit states--Nevada, Arizona, Florida, Michigan and California-where between 35 percent and 70 percent of existing homes have underwater mortgages.