Bank of America has been criticized for what is believed to be lackluster success in the home loan mortgage modification program through the federal Making Home Affordable Program. However, new reports show that second mortgages are taking their toll on the program and causing first mortgage lenders, like Bank of America, to be unable to lower mortgage payments.
Basically a homeowner with two mortgages would not be helped by a loan modification because a reduced payment or modification on the first mortgage would do little to make up for the payment on the second mortgage and it was this conflict between the two that is said to be causing so much trouble within the home loan modification program.
Bank of America is the first bank to either lower or eliminate payments on second mortgages and if other lenders follow, it could go a long way in helping not just the home loan mortgage modification program to get on its feet, but also give modifications to homeowners who have been struggling and denied modifications due to second liens.
Also, by implementing this second modification program, it could clear the way for homeowners who are struggling through the modification process and becoming frustrated with lenders over what seems to be a lack of organization.
The Second Lien Modification Program is just starting, but the hope is that more lenders will join the initiative, just as they did the Making Home Affordable Program, and these changes in the modification process will bring better results to the program and for homeowners in the coming months.
