Throughout 2010 home loan modifications have been the goal for many homeowners who were struggling to make their monthly mortgage payment due to various factors like unemployment, underwater mortgages, or cutbacks at their places of employment. Yet, modifications, which initially seemed to be the solution for many homeowners, turned out to be unhelpful when a second mortgage was in place, as this made a homeowner’s monthly mortgage payments too costly despite a primary mortgage modification.
However, in cases where homeowners may have a second mortgage, the Second Lien Modification Program has been implemented in order to address this issue and provide more affordability for homeowners who are struggling to make their payments. This modification program is an extension of the Making Home Affordable Program, which qualifies homeowners to receive a primary modification from their servicer if certain conditions are met.
Typically, if a homeowner qualifies for a primary home loan modification, they can be granted a secondary mortgage modification if they are unable to meet their payments due to the requirements from the second lien. While this federal program may address issues for homeowners with a second lien on their home, there are also some states, like North Carolina, which may also offer assistance on second lien for homeowners through the Hardest Hit Fund program.
Understandably, homeowners who are struggling with a second mortgage may not have the most affordable options when it comes to making their monthly payments. Yet, second lien modifications and even some forgiveness programs could help homeowners avoid foreclosure until their economic condition improves. While there are no guarantees when it comes to second modifications, homeowners who are having difficulty with a second lien are often advised to contact their servicer if they have a modification in place or if a homeowner is going through the modification process, they may also want to begin preparing for the possibility of a second lien modification.
Some homeowners who have not benefited from modifications, however, turned to foreclosure alternatives like short sales or deed in lieu of foreclosure plans, as these options could be available to homeowners who have suddenly come upon a difficult financial situation which has prevented them from meeting their mortgage payment. Obviously, these modifications are no guarantee when it comes to preventing foreclosure, but homeowners are still advised to explore all their options for affordability on their mortgage, as initiatives outside of simple primary modifications are in place to help homeowners avoid foreclosure.