Homeowners With Second Mortgage Struggle In Modification Program–Second Lien Plan Lowers Home Loan Payments

Homeowners are in need of mortgage assistance across our nation and, despite the home loan modification program offering homeowners the opportunity to restructure their home loan payments to a more affordable rate, many homeowner are having trouble making these payments. One difficulty homeowners were having, and for some are still having, was the problem of a second mortgage. Many homeowners who had a second lien on their home were unable to benefit from a modification since only the primary home loan was modified.

However, homeowners who had second lien troubles were introduced to the Second Lien Modification Program which has helped homeowners modify their second mortgage, which will make their overall home loan payment more affordable. Many homeowners have been unable to benefit from a modification for these reasons, so homes with a second lien were addressed through this program.

Yet, according to the June 2010 Making Home Affordable report some of the nation’s top lenders have not begun the implementation of this assistance plan as of yet. For instance, the the largest eight servicers in the Making Home Affordable Program released data on their use of this Second Lien Modification Program. Bank of America was said to have been operationally ready and offering homeowners a second lien modification in April of 2010, while CitiMortgage will be operationally ready and offering homeowners a second lien modification in October 2010. Other lenders that have already begun offering the Second Lien Modification plan to homeowners are J.P. Morgan Chase and Wells Fargo. However, American Home Mortgage Servicing, GMAC Mortgage, Litton Loan Servicing, and OneWest Bank will not be participating.

There are financial institutions who believe that this Second Lean Modification Program can be beneficial since homeowners who are unable to benefit from a modification often require an alternative form of assistance or face foreclosure. Many believe that it is simply easier for a second mortgage holder to work with a primary lender to make modifications so the homeowner can remain in their home rather than draw the homeowner closer to foreclosure, which does not benefit lenders. Since some of the nation’s top lenders are working with second lien holders to make modifications, it’s hoped that more homeowners who have a second mortgage on their home loan will be able to benefit from a modification by obtaining a more affordable home loan payment.