Second modifications on a home loan may be one of the main options that consumers have when it comes to combating issues related to their inability to afford their overall mortgage payment obligation, but many problems have arisen in terms of negative equity which these homeowners are facing as well. It’s recently been reported that more homeowners who have a second lien on their home are underwater, which is troubling since this is at a higher rate than homeowners who did not use a home equity loan for various personal reasons. Yet, the issue is not why homeowners took out a home equity loan, but how they can find more assistance to help them avoid foreclosure when their second mortgage has become difficult to pay and they are facing a negative equity situation on their home.
Sadly, there were indications that more homeowners have been leaving the housing market as a result of foreclosures, but factors like negative equity has yet to subside in many areas. While there are home loan modification efforts in place to help homeowners deal with the devaluation of their property, states have also used housing agencies and programs which work with major mortgage servicers to help homeowners find alternative plans to their second lien and negative equity problems.
However, one of the more popular and widely known programs that homeowners may use if affordability is their issue comes from the Second Lien Modification Program. Homeowners who are able to acquire a primary modification may be considered for this particular plan, but there are also some states that may offer housing assistance directly from plans like the Hardest Hit Fund, which may address certain issues that homeowners have in areas where a decrease in property value has been quite severe.
Areas that have averaged a higher rate of unemployment or may have seen a higher average of property devaluation are usually those targeted by these programs, and if factors like unemployment or the simple inability to meet a home loan payment due to a second mortgage is the issue, homeowners do have these options to help them find stability at the present time, as modification plans or unemployment assistance programs can help meet payments on a mortgage for a homeowner who may have been blindsided by certain financial problems which arose as a result of no fault of their own.
Homeowners can contact resources like housing counselors from the Making Home Affordable Program or HUD, but a state housing agency may also be able to offer assistance to these homeowners, or simply talking directly with a homeowner’s mortgage servicer is one of the more traditional routes that these men and women have taken. While homeowners who are struggling under the weight of their second mortgage may have to first qualify for a primary home modification, if the Second Lien Modification Program is their goal, issues like negative equity can make these problems more difficult to navigate, so homeowners are advised by officials to seek out assistance early so that they can get a jumpstart on any potential problems that may arise.