When they turned to the equity in their new home for help, they discovered that it had vanished, as the value of the house had declined to $125,000. Before long, they were juggling their house note, too, and now they are six months behind.
They have worked closely with their lender to have their loan modified. Recently, they were offered new terms that would lower their $954 monthly payment by $58 — not nearly enough to provide real relief.
“I know I should probably be grateful, but it feels like a slap in the face. A modification is supposed to help,” Amy said, “but what good is $58 a month?”
Plummeting home values
Although Watt is upset with Obama for not doing more to help underwater homeowners, Romney has advocated reducing government’s role in helping them. Romney says the various programs Obama has offered to keep underwater homeowners in their houses have only delayed the inevitable wave of foreclosures that he said would allow the housing market to find a new equilibrium.