Hello neighbors,

With the continuation of dropping home prices and families getting behind on their mortgage, experts feel that finding a solution for the underwater crisis may take some time. In addition to the Obama administration's plan to give 5 states 1.5 billion to devise programs to assist unemployed homeowners behind on their mortgages, experts feel these four options would also help.

Principal Reductions: Get rid of the negative equity. In order to do this, banks would need to modify loans as well as write down principal owed to reflect a home's value on the current market. Supporters of this solution feel that foreclosures are proving to be more costly. However, lenders will endure major losses if large portions of the loans are written down. In addition, complications may set in if there's a second mortgage or lines or credit.

Stabilize Home Prices: Some U.S. banks have started leasing foreclosed homes back to the original owners. In addition, home prices can be stabilized by controlling the release of distressed property into the current market.

Help for Unemployed Workers: The Mortgage Bankers Association is now considering a program that will give relief to home owners who have lost their jobs. The program would reduce mortgages for up to nine months to a more affordable rate which would be based on the income of the household. The National Bankers Association has requested for the government to add this tool to the Home Affordable Modification Program.

Freeze Foreclosure: Some experts feel that foreclosure freezes would give servicers the time to evaluate homeowners for loan modifications. The more people that are able to stay in their homes the closer we become to solving the problem of negative equity.