Dry Credit Limits Options For Homeowners

It has been a tough summer for Massachusetts homeowners. The state foreclosure rate jumped 109 percent in June, compared to the same month last year, according to the real-estate tracking firm the Warren Group.

Lawmakers and regulators have been working to help so-called underwater homeowners — those who owe more on their homes than they're worth. But a freeze-dried credit market is also making it hard for homeowners who are not upside-down but still struggling to make mortgage payments.

And here's the rub: Many of these homeowners hold a lot of equity, exactly what we're all told to aim for. But when it comes to negotiating an adjustment with the mortgage lender, that equity can work against you.

On Wednesday, the White House announced plans to help unemployed homeowners with up to $3 billion in mortgage assistance, including for people who are unemployed or underemployed because of a medical condition. As it stands right now, Massachusetts will be able to tap into $1 billion.

We take a look at the post-crisis mortgage market.

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