Those homeowner’s who find themselves upside-down in their mortgages have previously hit a wall when attempting to refinance their home mortgage.  That wall just got shorter by about 20%.  The Wall Street Times reported July 2 ( http://tinyurl.com/m4wzs6 ) that homeowners with mortgages worth up to 125% of their homes value may now be eligible for a refinance loan.  This guideline applies to any mortgage loan backed by Fannie Mae or Freddie Mac.  However, many other mortgage refinancing obstacles still remain.  Of primary note, homeowners can’t be behind on mortgage payments!   Also, mortgage refinancing will still take into account a persons credit score, and likley debt to income ratio.  Last, but not least, mortgage companies have to navigate through the confusing mess of  ‘red tape’ which bogs down the process.  As a result, I have a feeling that while a distressed homeowner waits to get an approval on their refinance loan to lower payments, they could begin to fall behind on their mortgage payment, which is what they were trying to avoid in the first place!  If you find yourself in this position you might consider a loan modification instead.  For a loan modification the criteria does not require you to be current on payments, or have a good credit score, and you can be upside-down in your current mortgage.  To learn more on the subjects of  loan modification, stopping foreclosure, forebearance agreements, and other options to consider if your mortgage is in default or in danger of default go here: ( www.apsloanmods.com).