Homeowners who are in need of lower home modification payment costs have often complained that the federal modification initiative does not offer the affordability that they need on a primary home loan modification, and it has been discovered that some cases where this problem is present, a second lien on a home may be to blame. For this reason, the Second Lien Modification Program was implemented as a way to offer further stability and affordability to homeowners who are in a position where they are financially distressed and cannot meet their monthly mortgage payment.
Homeowners who qualify for the Second Lien Modification Program are usually those who will meet certain eligibility requirements, like having their first mortgage modified under the Home Affordable Modification Program, but who are still current on their HAMP modification, meaning they have not missed three consecutive payments, who owe more than $5000 on their second mortgage and have a monthly mortgage payment on the second lien that is more than $100. These qualifications, which are outlined on the Making Home Affordable Website, are hoped to bring about more solutions to problems where homeowners are facing payment difficulty even when a primary modification has been set in place.
Major financial institutions like Bank of America, GMAC mortgage, J.P. Morgan Chase, Citigroup, and Wells Fargo all are participants in the Second Lien Modification Program, and this plan may be able to assist homeowners if affordability is an issue and homeowners still face the potential loss of their home through foreclosure due to the fact that they have missed payments during a modification. The Making Home Affordable Program reports that there has been 16,951 second lien modifications started, as of the February 2011 report, so this may be an option that homeowners should consider if they are finding that their primary home loan modification payment is too costly.
Understandably, there have been issues with homeowners in the modification program surrounding the trial modification process, paperwork issues, and even sustainability when it comes to making mortgage payments within a permanent modification plan, but there are resources like housing counselors that homeowners may be able to speak with that could offer help when it comes to meeting these monthly costs. Some housing counselors, like those approved by either HUD, the FHA, or the Making Home Affordable Program may be able to guide homeowners through the modification process or help them apply for plans like the Second Lien Modification Program, but they may also help with general financial issues that homeowners may have that will help them eliminate wasteful spending and better afford their home loan.
Some homeowners may benefit from options like nonprofit credit counseling, where areas of needless waste in their financial habits can be identified and eliminated, repayment plans can be formed so that homeowners will be under less financial stress, and in some cases, homeowners may find that they are more easily able to meet their mortgage payments, even if a modification plan is in place. However, rather than homeowners simply struggling under their mortgage debt, even when a modification is in place, advisors have counseled these individuals to either speak with their mortgage servicer, a Hope Now representative, or someone from HAMP to inquire about expansion plans, like the Second Lien Modification Program, that may help provide further affordability on a home loan.