Homeowners who may have a second lien on their home loan could find affordability in cases where a primary home loan modification is offered. In the past, there have been homeowners who have complained that home loan modifications were unhelpful due to the fact that their monthly mortgage payment was still too costly and, as a result, homeowners continued to miss mortgage payments and default despite being in a home loan modification program.
In these cases, many homeowners had problems centered around a second lien on their mortgage, which created a higher monthly payment cost than was able to be met by homeowners in financial distress. Obviously, homeowners were very frustrated at having been granted a primary modification and still facing a monthly mortgage payment that was too costly for them to meet, but the Second Lien Modification Program was created in the hopes of addressing these issues.
Homeowners who qualify for a Second Lien Modification option may have their interest rate reduced, an extension their second mortgage term, a principal deferment, or in some cases a second lien may have a percentage of their principle forgiven if not erased entirely. Obviously, not all homeowners may be offered forgiveness options or the principal on a second lien erased, but a variety of methods have been used by servicers as a way to address issues related to the second mortgages which have caused homeowners to default and face foreclosure.
However, homeowners who do have a second lien on their home must first complete a primary home loan modification program before a servicer may address issues related to their second mortgage. Obviously, homeowners have had a great deal of financial troubles related to their mortgage payments over the past months, but there are opportunities through modification and extension programs from the Making Home Affordable Program and directly from servicers’ in-house plans which may be beneficial to homeowners who are facing financial troubles in their personal lives.
Yet, issues related to a homeowner’s mortgage payment may need to be addressed early so that homeowners may find solutions to their particular home loan difficulties. While primary and secondary modifications have not always stopped homeowners from losing their home to foreclosure, homeowners are felt to have a better chance at finding solutions to their mortgage payment troubles if assistance is sought out early through mortgage servicers or approved housing counselors from the Making Home Affordable Program.