Second Lien Modification Program–Finding Lower Mortgage Payments After Primary Modification Assistance

The Second Lien Modification Program has been one way that homeowners have found more affordability through lower monthly mortgage payments after they have had a primary modification on their home loan. Some homeowners have been in a situation where the second lien on their mortgage has been causing trouble that, due to the expense of this mortgage payment, has made a primary home loan modification ineffective for homeowners who were struggling to avoid foreclosure.

However, the most recent Making Home Affordable Program report stated that, through February 2011, 16,951 seconds lien modifications have been made to homeowners who had a first lien modification completed and were with a servicer that participated in this particular program. Numerous financial institutions have been able to offer modification plans to homeowners, as many of the top banks in our nation had used HAMP as a way to prevent foreclosure for homeowners, despite the fact that there have been some problems arise.

Many aspects of the housing market related to these foreclosure prevention plans have been reviewed and, in some cases, there are officials who want changes to come about due to the fact that homeowners have seen what many feel to be lackluster success in terms of the overall program’s effectiveness at not only offering lower mortgage payments but sustaining these plans in the long term so that homeowners can get back to a more stable financial position. While there are aspects like unemployment and negative equity that has caused homeowners to see difficulties arise in their financial life that have prevented them from paying their mortgage, options through these extension plans, like the Second Lien Modification Program, have been one way that servicers have gone beyond primary modifications on a homeowner’s first mortgage to help them avoid the loss of their home through foreclosure.

Understandably, there are still opponents of the modification program and some have requested that changes either be made so that a greater number of individuals could be helped or the program be terminated as a result of not meeting original goals that were set at its inception. However, there are many who feel that if programs like the Second Lien Modification initiative were used in conjunction with primary modifications or other extension plans, more homeowners may be aided while they sort through financial troubles that may have arisen.

Arguments have also continued in the area of need for these modification efforts as even private modification plans, which have reportedly helped a greater number of homeowners than the federal initiative, are still seeing homeowners default again after a lower mortgage payment has been offered. However, homeowners who may have a second mortgage are still finding that a simple primary modification may not be helpful in terms of giving them a long-lasting mortgage payment that is affordable, so this particular extension plan for second liens is still being made available through major financial institutions and the Making Home Affordable Program, in the hopes of offering more affordability to homeowners struggling to pay both their primary and secondary mortgage obligation.